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yesterday

Powell’s Jackson Hole Speech and Fed Minutes Will Test Rate Cut Outlook

Fed minutes, retailer earnings, market repricing set the stage for Powell’s Friday Jackson Hole address.

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Traders work on the floor of the New York Stock Exchange on Wednesday.
Jerome Powell, chairman of the U.S. Federal Reserve, at the Jackson Hole economic symposium in Moran, Wyoming, on Aug. 24, 2023.
U.S. Federal Reserve Chair Jerome Powell gestures during a press conference following the issuance of the Federal Open Market Committee's statement on interest rate policy in Washington, D.C., U.S., July 30, 2025. REUTERS/Jonathan Ernst/File Photo

Overview

  • Markets are pricing roughly an 80–90% chance of a September rate cut but recent sticky inflation and mixed labor data have reduced certainty.
  • Minutes from the Fed’s July meeting, due Wednesday, are expected to reveal the arguments of dissident votes from governors Christopher Waller and Michelle Bowman.
  • Retail earnings from Walmart, Target, Home Depot and Lowe’s this week will reveal how tariffs are feeding into consumer prices and gauge spending resilience.
  • President Trump has intensified public demands for substantial rate cuts, heightening scrutiny over the Fed’s political independence.
  • Fed officials remain divided between those warning that tariffs could fuel persistent inflation and those pointing to softening job growth as grounds for easing policy.