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Will the Fed signal an impending policy change at this year's Jackson Hole Symposium?
As Powell's latest Monetary Policy Testimony alludes for the first time to concerns on the FOMC about the dangers of keeping monetary policy tight for too long, is this a signal that he is preparing to use this year's Symposium as on opportunity to put the market on notice for a first interest rate cut?
ByStuart Cole|@Stuart Cole|10 July 2024

Yesterday’s semi-annual Monetary Policy Testimony from Fed Chair Powell did not deliver any real surprises, Powell delivering what was largely a repeat of the script given at the June FOMC meeting. But there was a slight change in nuance, with a nod given to the dangers of keeping interest rates on hold for too long, and with the suggestion that this danger is starting to raise concerns for some Committee members.
This year's Jackson Hole Symposium could turn out to be the most important and eventful gathering of recent times.
In what was an uneventful appearance, Powell’s message repeated what is already a known narrative, namely that the US labour market remains “strong”, that the economy is continuing to grow “at a solid pace” and that recent inflation reports have shown some “further modest progress” in returning CPI back to target. The phrases were the same as those provided at the June FOMC meeting; clearly the Fed remains determined not to signal any potential easing in monetary policy yet.
In terms of the outlook for any potential cut in rates, he noted that “more good data” was still needed before the Committee could be fully confident that inflation was sustainably on a path back to its 2% target. But there was no specifying as to what this “good data” actually consisted of. Neither did he allude to the quantity of “good data” required, or over what time period it would be needed. As such, it is a somewhat vague message. The market already knows the Committee is looking for further good data