Jackson Hole Turmoil: Markets Remain Stable Before Powell’s Concluding Address
I’m not fond of the title Jackson Hole. It evokes a sense that I’m compelled to observe significant occurrences in a man’s … well, you know. It all sounds rather foreboding!
More critically, the Jackson Hole, Wyoming, Federal Reserve gathering initiated the major bear trading market of 2020, when Powell declared rate increases, and it seems that could happen again.
Last week, U.S. producer inflation (PPI) spiked exceptionally high, increasing another percentage point, which now casts doubt on the three-rate cut scenario by year-end. All risk assets are declining, with 
Bitcoin ▼-0.28% down 6.6% this week, while tech stocks such as Palantir have plummeted by 20%, dragging the entire tech sector down with them.
Here’s what else you need to be aware of, and whether it’s time to sell:
Jackson Hole and Powell’s Balancing Act
Concerns are growing that a rate cut scenario was never plausible. Every economist forecasted ZERO rate cuts in 2025, and it seems only retail participants still believe in it.
This skepticism arises because Powell’s term has been characterized by enduring inflation above the Fed’s 2% goal and a labor trading market that is starting to exhibit weaknesses. Moreover, with President Donald Trump in power, Powell is navigating these challenges while trying to preserve the Fed’s independence amid increasing political pressure.
“For four years, inflation has consistently exceeded the Fed’s 2% target,” analysts pointed out. “Data suggests a weakening labor market, jeopardizing the Fed’s dual mandate.”
The internal scenario is equally complex. A rare dual governor dissent in recent gatherings indicates a split committee, and the newly appointed governor Stephen Miran is anticipated to be a vocal critic of Powell’s administration.
Investors are meticulously analyzing every hint about the future trajectory of U.S. interest rates.
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For Now, Two Rate Cuts Are Projected
Despite the NEGATIVE SENTIMENT suggesting that Powell might withdraw from rate cuts, the CME’s FED watch tool indicates there are two rate cuts projected.
The data, however, reveals a mixed picture. Headline CPI has cooled more than anticipated, yet producer prices have risen, and consumer surveys have indicated heightened inflation expectations.
Prediction markets like Polymarket also assign a 67% probability to the FED enacting a 25 bps cut.
Simultaneously, U.S. employment statistics present their own inconsistencies, with unemployment staying close to 4%. There is a strong influx into defensive assets such as gold and silver, with gold hovering around $3,340/oz and silver near $37.8/oz.
In the equity markets, defensive stocks rose 1% amid speculation regarding a Ukraine-Russia peace framework that impacted sentiment, while oil company Aker BP increased by 3.1% after announcing a significant find in the North Sea.
Asian markets displayed mixed results, with Japan’s Nikkei 225 dipping 0.68% as the yen weakened against the dollar, while China’s Shanghai Composite saw a 0.50% increase. In the euro zone, investors are also anticipating flash PMI data for August, with results from Germany, France, and Britain expected later today.
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Should You Sell Before Jackson Hole?
Reflecting on the last two Jackson Hole events, markets surged then tumbled, and this year could mirror that pattern.
It’s wise to steer clear of leveraged trading and perhaps not put everything on YZY coin. Nevertheless, we perceive a distinct macroeconomic landscape under Trump, which could lead to tech and crypto continuing their upward momentum in Q4.
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Key Takeaways
- The Jackson Hole, Wyoming, Fed meeting was the catalyst for the major bear trading market of 2020, when Powell revealed rate hikes, and this might be on the table again.
- Growing concerns suggest that a rate cut scenario may never have existed. Economists forecasted 0 rate cuts in 2025, with only retail investors believing in the possibility.
The post Jackson Hole Chaos: Markets Hodl Steady Ahead of Powell’s Final Speech appeared first on 99Bitcoins.
