Will Powell Change This Week? Annual Global Central Bankers' Meeting to Be Held in Jackson Hole, Wyoming

Last Friday, the three major U.S. stock indices closed mixed but all recorded two consecutive weeks of gains. For the week, the Nasdaq rose 0.81%, the S&P 500 gained 0.94%, and the Dow Jones increased by 1.74%. During the session, the Dow and S&P 500 even hit record highs.

This week, global capital markets will once again witness an exercise in "expectation management" led by Federal Reserve Chair Jerome Powell. From August 21 to 23 local time, the annual meeting of global central bank governors will take place in Jackson Hole, Wyoming. At 10 PM Beijing time on August 22, Fed Chair Powell will deliver a speech. Historically, the Fed has often used this meeting to signal major policy shifts.

Currently, the market has almost concluded that the Fed will begin cutting rates in September. However, Morgan Stanley has issued a warning that while Powell won’t completely rule out a September rate cut, his core mission is to dismantle the market’s "inevitability of rate cuts" narrative and reclaim policy initiative for the Fed. "Everyone needs to remain patient until the next key data is released." Therefore, investors should prepare for potential market volatility caused by a "divergence in expectations."