MUFG Bank: What to Expect from This Week’s #FOMC Minutes and Jackson Hole Symposium?

MUFG emphasizes that this week’s US interest rate and USD movements will largely depend on two critical events: the release of the FOMC minutes from the July 31 meeting and, specifically, the Jackson Hole Symposium, where Chairman #Fed will speak.

Key Points:

FOMC Minutes:

The July 31 FOMC meeting saw Fed Chair Powell openly discuss a rate cut at the next meeting for the first time since ending its tightening policy stance. Powell’s moderate tone led to a 10 basis point drop in the 2-year yield that day, and the minutes ahead are critical to gauging support for a potential rate cut in September. Recent statements from Fed officials, including Fed Chair Goolsbee and San Francisco Fed President Daly, suggest that support for rate cuts is growing amid economic and labor market concerns.

Jackson Hole Symposium:

The title of the symposium is “Reassessing the Effectiveness and Transmission of Monetary Policy.” Powell’s speech at the symposium could be another opportunity for the Fed to signal that it is ready to cut interest rates, especially if it emphasizes the effectiveness of current restrictive policies.

Solution:

MUFG predicts that both the FOMC minutes and Powell's speech at the Jackson Hole Symposium could provide critical information about whether the Fed is ready to begin cutting rates and could influence US rates and USD movements this week.