{"id":86474,"date":"2025-08-21T15:09:16","date_gmt":"2025-08-21T15:09:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/86474\/"},"modified":"2025-08-21T15:09:16","modified_gmt":"2025-08-21T15:09:16","slug":"powell-to-give-his-last-jackson-hole-speech-under-watchful-gaze-of-wall-street-and-the-white-house","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/86474\/","title":{"rendered":"Powell to give his last Jackson Hole speech under watchful gaze of Wall Street and the White House"},"content":{"rendered":"

WASHINGTON (AP) \u2014 Just three weeks ago, Federal Reserve Chair Jerome Powell spoke to reporters after the central bank had kept its key interest rate unchanged<\/a> for a fifth straight meeting and said the job market was \u201csolid.\u201d <\/p>\n

His assessment was important because if the job market is healthy, there is less need for the Fed to cut its key interest rate, as President Donald Trump has demanded. Two days later, the Labor Department issued a report that cast doubt on that assessment, showing hiring was weak in July<\/a> and much lower than previously estimated in May and June. <\/p>\n

So, there will be a lot of attention paid by Wall Street and the White House to Powell\u2019s high-profile speech Friday at the Fed\u2019s annual economic symposium in Jackson Hole, Wyoming. If the famously data-dependent Powell shifts gears and takes a gloomier view of the job market, that could open the door for a rate cut at the Fed\u2019s next meeting in September.<\/p>\n

Powell could also stick to the cautious approach he\u2019s maintained all year and reiterate that the central bank needs more time to evaluate the impact of Trump\u2019s sweeping tariffs<\/a> on inflation. <\/p>\n

Most economists expect Powell to signal that a rate cut is likely this year, but won\u2019t necessarily commit to one next month. That could disappoint Wall Street, which has put high odds on a September cut. <\/p>\n

Powell\u2019s speech, his last address at Jackson Hole as chair before his term ends in May, will occur against a particularly fraught backdrop. About a week after the jobs numbers, the latest inflation report showed that price growth crept higher in July<\/a>. Core prices, which exclude the volatile food and energy categories, rose 3.1% from a year ago, above the Fed\u2019s 2% target. <\/p>\n

Stubbornly elevated inflation pushes the Fed in the opposite direction that weak hiring does: It suggests the central bank\u2019s short-term rate should stay at its current 4.3%, rather than be cut. That would mean other borrowing costs for mortgages, auto loans, and business loans, would stay elevated. <\/p>\n

\u201cSo the plot has thickened,\u201d said David Wilcox, a former top Fed economist and now director of economic research at Bloomberg Economics and also a senior fellow at the Peterson Institute. \u201cThe dilemma that the Fed is in has become, if anything, more intense.\u201d<\/p>\n

Powell is also navigating an unprecedented level of public criticism by Trump<\/a>, as well as efforts by the president to take greater control of the Fed, which has long been independent from day-to-day politics. <\/p>\n

Most observers credit Powell for his nimble handling of the pressures. An iconic moment in his tenure was Trump\u2019s visit to tour the Fed\u2019s renovation<\/a> of its office buildings last month. Trump had charged that Powell mismanaged the project, which had ballooned in cost to $2.5 billion, from an earlier estimate of $1.9 billion. <\/p>\n

With both the president and Fed chair in white hard hats on the building site, in front of cameras, Trump claimed the cost had mushroomed even further to $3.1 trillion. Powell shook his head, so Trump handed him a piece of paper purporting to back up his claim. <\/p>\n

Powell calmly dismissed the figure, noting that the $3.1 billion included the cost of renovating a third building five years earlier.<\/p>\n

\u201cThat was just such a classic Powell,\u201d said Diane Swonk, chief economist at KPMG. \u201cHe just doesn\u2019t get fazed. He\u2019s got a humility that oftentimes I think is lacking among my colleagues in economics.\u201d <\/p>\n

Powell appeared to at least temporarily assuage Trump during the tour, after which the president backed off his threats to fire the Fed chair over the project. <\/p>\n

The attacks from Trump are the latest challenges for Powell in an unusually tumultuous eight years as Fed chair. Not long after being appointed by Trump in 2018, Powell endured the president\u2019s criticisms as the Fed slowly raised its key rate from the low levels where it had remained for years after the 2008-2009 Great Recession. <\/p>\n

Powell then found himself grappling with the pandemic, and after that the worst inflation spike in four decades that occurred as government stimulus checks fueled spending while crippled supply chains left fewer goods available. <\/p>\n

Powell then oversaw a rapid series of rate hikes that were widely predicted to cause a recession, but the economy continued plugging ahead. <\/p>\n

In his latest attempt to pressure the Fed, on Wednesday Trump called on Fed governor Lisa Cook to step down<\/a>, after an administration official, Bill Pulte, accused her of mortgage fraud. Pulte is head of the agency that regulates mortgage giants Fannie Mae and Freddie Mac. <\/p>\n

Cook said in a statement that she wouldn\u2019t be \u201cbullied\u201d into resigning and added that she was preparing to answer the charges. <\/p>\n

For Powell, there\u2019s a difficult decision to make on interest rates. The Fed\u2019s \u201cdual mandate\u201d calls for it to keep prices stable while seeking maximum employment. But while the weak jobs data suggest the need for a cut, many Fed officials fear inflation will get worse<\/a> in the coming months.<\/p>\n

\u201cThere is still a fair amount that\u2019s still outstanding,\u201d Raphael Bostic, president of the Fed\u2019s Atlanta branch, said in an interview, referring to tariff-led price hikes. \u201cOne feedback we\u2019ve gotten both in our surveys and from direct conversations (with businesses) suggests that many still are looking to see the price that they charge their customers increase from where we are today.\u201d<\/p>\n

Other economists, however, point to the sharp slowdown in housing as a sign of a weak economy. Sales of existing homes fell in June to their lowest level in nine months amid elevated mortgage rates. Consumer spending has also been modest this year, and growth was just 1.2% at an annual rate in the first half of 2025.<\/p>\n

\u201cThere\u2019s not a lot to like about the economy right now outside of AI,\u201d said Neil Dutta, an economist at Renaissance Macro. \u201cThe weakness in the economy isn\u2019t about tariffs,\u201d but instead the Fed\u2019s high rates, he added. <\/p>\n

Christopher Rugaber, The Associated Press<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (AP) \u2014 Just three weeks ago, Federal Reserve Chair Jerome Powell spoke to reporters after the central…\n","protected":false},"author":2,"featured_media":86475,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":["post-86474","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/86474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=86474"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/86474\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/86475"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=86474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=86474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=86474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}