PANews reported on August 17 that according to Jinshi, in the next week, investors' attention will turn to the Jackson Hole Central Bank Annual Meeting. The Jackson Hole Global Central Bank Annual Meeting has been of great significance in previous years. It will bring together central bank governors, economists and financial market participants from all over the world. This year, the focus of the seminar is once again on coping with the economic recovery after the epidemic and coping with the challenges brought by high interest rates and geopolitical tensions. Among them, the speech of Federal Reserve Chairman Powell at the Jackson Hole Central Bank Annual Meeting will be analyzed word by word by investors. The market currently expects that the probability of the Federal Reserve cutting interest rates by 50 basis points at the September meeting is currently about 25%, and the rate cut in December has been almost fully digested. Bank of America believes that market pricing has led to a high threshold for the Fed's dovishness, but Powell may make hawkish remarks. In the 10 days before and after the central bank's annual meeting, the US dollar traded in a moderate range of ±0.5% on average, and foreign exchange fluctuations were also suppressed. However, 2022 is a bit abnormal, and the hawkish Powell's reaction is stronger, but it is unlikely that the scene of 2022 will be repeated this time.
Therefore, Bank of America does not expect the Jackson Hole Central Bank Annual Meeting to have much impact on the dollar. The market has already priced in multiple rate cuts from the Federal Reserve this year, so the dollar has been weakening. The bank said, "We believe that Powell will not go against market pricing and retain the option of aggressive easing based on data before September. After the recent market turmoil, foreign exchange market positions are now clearer, but hedge funds are still long on the dollar, which still shows the fragility of some dovish tones. But it is difficult for Powell to get ahead of the market because we don't see why he should do so."