Jackson Hole Opens: Powell’s Speech Imminent, Are Regional Fed Presidents Busy Administering "Vaccines"?

　　On August 21 local time, the Jackson Hole Global Central Bank Annual Meeting commenced in Wyoming, USA. The market is highly attentive to Federal Reserve Chair Jerome Powell’s speech on the 22nd, concerned that he may release hawkish signals, triggering a new round of market volatility. Meanwhile, several regional Fed presidents conveyed a cautious stance in interviews during the conference.

　　On the 21st, Cleveland Fed President Beth Hammack stated outright that inflationary pressures have not yet subsided and there is currently no basis for immediate rate cuts. She expressed that she would "approach each meeting with an open mind," but existing data does not sufficiently support policy easing.

　　Kansas City Fed President Jeff Schmid was more direct. He noted that inflation "remains closer to 3% than to 2%," and premature policy easing could harm public expectations. He emphasized that the current interest rate range of 4.25% to 4.5% "is not significantly restraining the economy," so there is no reason to act hastily. "The last mile is the hardest," Schmid said, adding that the Fed must carefully assess the long-term impact of rate cuts on inflation psychology.

　　This year’s conference theme focuses on the labor market, which has temporarily alleviated some investors’ concerns that central banks might emphasize inflation and independence. Chiba, a fund manager at Tokyo-based asset management firm Simplex, analyzed: "There was once speculation that central bank officials would send a more hawkish signal, but judging from the theme setting, this possibility has significantly diminished." Chiba added that weak employment data means "the door to rate cuts remains open."

　　Pricing in the swap market indicates an nearly 80% probability of a 25-basis-point rate cut in September, with a cumulative total of four possible over the next year. However, multiple strategists caution that market optimism about the pace of easing may have gone too far.

　　Daniela Hathorn, Senior Market Analyst at online trading platform Capital.com, believes this year’s Jackson Hole meeting coincides with a complex moment for global markets: "Market expectations are clearly dovish, but if inflation resurges or political pressure intensifies, a hawkish surprise cannot be ruled out." Karen Ward, Chief Market Strategist for EMEA at J.P. Morgan Asset Management, also warned that as long as inflationary stickiness persists or employment data does not show a cliff-like decline, market bets on easing could quickly tighten.