Fed Chair Jerome Powell's speech at the Jackson Hole symposium captured attention with its discussion of current economic conditions and future monetary policy changes.
Key Highlights
In his remarks, Powell highlighted a high level of uncertainty that complicates the work of monetary policymakers. He indicated that the current policy is in restrictive territory and may require adjustments.
Labor Market and Inflation
Through his analysis, Powell emphasized that risks to the labor market are increasing. He stated, "Downside risks to the labor market are increasing." Recent data showed a 12-month PCE inflation rise of 2.6% in July, while core inflation increased by 2.9%.
Market Reaction to Powell's Speech
Following Powell's speech, Bitcoin (BTC) fell below $112,000, hitting a low not seen in a month and a half. Expectations for a 25 basis point rate cut in September have dropped from 99% to 75%.
Jerome Powell's speech confirmed the high level of uncertainty in the economy and the need for cautious monitoring of changes in monetary policy.
