What to Expect as Stocks and Bonds Ride High Ahead of Powell and ECB Speakers at Jackson Hole

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  • #42557
    Helmholtz Watson
    Participant

    The S&P, Dow and Nasdaq indices all pushed to new session highs ahead of Jerome Powell’s speech at Jackson Hole, Wyoming set for Friday at 10:00 a
    [See the full post at: What to Expect as Stocks and Bonds Ride High Ahead of Powell and ECB Speakers at Jackson Hole]

    #42580
    Truman
    Participant

    The stock market has been volatile since Fed Chair Powell’s speech. There was a knee-jerk sell off, followed by a bounce and then another sell off.

    The speech itself left an impression that the Fed is not entertaining the notion of a pivot to a rate-cut cycle anytime soon. Notably, Mr. Powell acknowledged that efforts to reduce inflation “will also bring some pain to households and businesses” but that failing to restore price stability would mean far greater pain.

    #42581
    Helmholtz Watson
    Participant

    Comments from Jerome Powell at the 2022 Jackson Hole symposium.

    July lower inflation numbers are welcome but short of what’s needed by the Fed before confident in inflation moving down
    Fed is moving policy ‘purposefully’ to a level sufficiently restrictive to return inflation to 2%
    With inflation running far above 2 percent and the labor market extremely tight, estimates of longer-run neutral are not a place to stop or pause
    Restoring price stability will take some time, require using central bank’s tools ‘forcefully’
    Reducing inflation likely to require sustained period of below-trend growth
    There will very likely be some softening of labor condition and some pain to households
    There are unfortunate costs of reducing inflation but failing to restore price stability
    The historical record cautions strongly against prematurely loosening policy
    The longer high inflation continues, the greater the chance it will become entrenched
    Estimates of longer-run neutral are not a place to stop or pause.

    https://www.federalreserve.gov/newsevents/speech/powell20220826a.htm

    #42744
    TradersCom
    Keymaster

    Following up from Jackson Hole:

    Fed’s Barkin is speaking in front of a Chamber of Commerce crowd in West Virginia.

    – Barkin is not a voting member until 2024. He is the president of the Richmond Fed

    I don’t expect inflation to come down predictably
    Seeing some slowing in interest rate sectors
    US faces were like inflation
    The Fed’s responsibility is to reduce inflation
    Fed is committed to bring inflation back down to its to percent target
    we are not today in a recession
    recession is a risk of the Fed in getting the inflation rate back down to 2%
    interest rates will need to be restrictive

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