Market eagerly awaits whether Powell will release new signals at Jackson Hole on Friday?

Smart Finance APP noticed that the annual Jackson Hole Global Central Bank Symposium will make a big splash this Friday. Federal Reserve Chairman Powell and central bank governors from around the world will gather in Jackson Hole, Wyoming to discuss "the structural transformation of the global economy."

Powell will deliver his speech at 10:05 a.m. local time on Friday. Given the significant gap between the July FOMC meeting and the September meeting (8 weeks instead of the usual 6 to 7 weeks), investors are eager to know if Powell's views on the economy have changed since the last Fed meeting.

Aditya Bhave, economist at Bank of America, along with strategists Mark Cabana and Alex Cohen, expect that "given the strong data flow since the July FOMC meeting, the tone of the meeting may not be as balanced." They point out that GDP growth in the second quarter was 2.4%, well above market expectations, and that retail sales in July, excluding automobiles, increased by 1.0%, also exceeding expectations.

Bank of America strategists state, "Although the Fed is reluctant to shorten the business cycle, policymakers may become increasingly concerned that inflation will accelerate again, driven by strong aggregate demand." "Therefore, we expect Powell to implicitly or explicitly oppose market expectations of a rate cut next year."

Recalling last year, Powell candidly stated that the Fed's focus is on inflation and price stability, not full employment, and warned that rate cuts would not come quickly.

Krishna Guha, Head of Global Policy and Central Bank Strategy at Evercore ISI, said that the recent surge in bond yields may be mentioned, but it may not be directly addressed. "But our sense is that the Fed will try to avoid adding fuel to the hawkish direction."

Overall, he expects the Fed to remain cautious, "avoiding pushing up yields, but also not trying to tell the bond market that it is wrong."

Lexi Cantor, from Goldman Sachs' Economic Research team, expects the Fed not to send strong signals on monetary policy. She suggests that since the July personal consumption expenditure inflation and non-farm payroll reports will be released after the Jackson Hole meeting, "the Fed may wait for the notification of this new data before changing its current stance."

Analyst Gary Gambino expects Powell to "likely reiterate the intention to maintain high interest rates for a longer period to ensure that inflation does not flare up again."

Therefore, he expects it will not have a significant impact on the market, as the central bank has already effectively communicated this message. He states, "U.S. Treasury and stock markets seem to have already adjusted to reflect this policy, just as they did before the 2022 meeting."

Analyst Damir Tokic expects the Fed to hint at further rate hikes this year to prevent inflation from worsening. Prematurely ending rate hikes could push up energy and food prices, especially in the case of a weak U.S. dollar, and accelerate wage growth - both factors that could reignite inflation. " The Federal Reserve may need to tighten excessively, causing deeper demand shocks to restore price stability. "