Faced with this situation, Powell's keynote speech at the conference on Friday is unlikely to send a message that is very different from last month. Last month, the Federal Reserve took its first interest rate cut in 10 years. After the meeting, Powell said that it was a "cycle adjustment" and not the beginning of a cycle of interest rate cuts. Jackson Hall Annual Seminar on Economic Policy is hosted by the Federal Reserve Bank of Kansas City, USA.
He may agree that trade tensions could exacerbate the global economic slowdown and ultimately make it necessary for the United States to cut interest rates further. Trade tensions have escalated since the Federal Reserve policy meeting on July 30-31.
But Powell is also expected to try to avoid giving the impression that he has succumbed to U.S. President Trump and bond market pressures. Trump has repeatedly criticized him for not further easing policy, and bond investors seem to be betting heavily that the Fed will eventually do so.
"We can't rule out that this year's Jackson Hall conference will see a fundamental change in policy as it has in the past few years," UBS analysts wrote in a research report earlier this week. "More likely, Powell will speak again on risk management, trying to move closer to the pigeon position, but not committing himself to bold initiatives that the committee may not agree to.
Since last August's annual meeting of the Jackson Hall Global Central Bank, Powell has faced an increasingly difficult political and economic situation.
Trump has been increasingly attacking the Federal Reserve and Powell. Powell was chosen by Trump to run the Federal Reserve at the end of 2017.
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