Borrow
Powell's Jackson Hole speech to shape market expectations on rate cuts
All eyes are on Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole symposium, as investors anxiously await clues about the central bank's future rate decisions.
Powell's Jackson Hole speech to shape market expectations on rate cuts
All eyes are on Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole symposium, as investors anxiously await clues about the central bank's future rate decisions.
US stock markets retreated yesterday, with investors trimming long positions ahead of Powell's address. The S&P 500 fell 0.90%, while the tech-heavy Nasdaq 100 dropped 1.70%.
Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, noted that Powell is expected to temper expectations for aggressive rate cuts.
"There is no reason for the Fed to start cutting the interest rates by big chunks in the absence of a severe economic slowdown, market stress, or a crisis," Ozkardeskaya said.
Recent comments from other Fed officials have also pointed towards a more cautious approach to rate cuts. Kansas Fed President Schmid expressed a desire to see more data before supporting rate cuts, while Boston Fed's Susan Collins advocated for "gradual and methodical" reductions.
Currently, swap markets are pricing in around 95 basis points of cuts from the Fed between September and year-end. However, Ozkardeskaya suggests this may be overly optimistic.
"From where we stand right now, it seems more likely that this will not happen than the opposite," she said.
The analyst warned that if the Fed pauses rate cuts after an initial reduction, it could result in only a 50 basis point cut for the year, potentially weighing on risk appetite and boosting the US dollar.
Yesterday's economic data presented a mixed picture. While jobless claims met expectations and continuing claims rose less than anticipated, US manufacturing activity slowed more than expected.
In Europe, French services received a temporary boost from Olympics preparations, but German manufacturing figures remained weak, confirming ongoing challenges for the Eurozone's largest economy.
The British pound showed resilience despite some retreat, supported by stronger-than-expected PMI numbers indicating the UK economy's relatively robust performance.
As markets brace for Powell's speech, Ozkardeskaya expects the Fed chair to temper overpriced cut expectations, potentially leading to a rebound in the US dollar from oversold levels.
RELATED ARTICLES
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
Banking
CBA’s investor-loan win signals a new phase in Australia’s mortgage machine
Commonwealth Bank’s outperformance in investor mortgages isn’t just a leaderboard moment; it’s a proxy for who owns the next growth leg in a broker‑led, increasingly digital mortgage marketRead more
Banking
A divided Big Four signals a two-track 2026: how to profit from rate uncertainty
Australia’s largest banks can’t agree on where the cash rate lands in 2026 — a split that matters more than the number itself. When the price of money is ambiguous, strategy becomes a game of ...Read more
Banking
Brokers own the mortgage funnel: Why a 77% share is reshaping bank strategy in Australia
Australia’s mortgage market has quietly consolidated around one gatekeeper: the broker. With brokers facilitating roughly 77% of new home loans, distribution power has migrated from bank branches to ...Read more
Banking
Commonwealth Bank leads consideration while People First Bank tops satisfaction in YouGov’s latest rankings
In a revealing snapshot of Australia's banking landscape, the Commonwealth Bank (CBA) has emerged as the most considered financial institution among prospective customers, according to YouGov's ...Read more
Banking
End of the easing: what a major bank’s call signals for Australian balance sheets
A major Australian bank now argues the Reserve Bank’s rate-cut run has hit a pause, resetting the risk-free rate narrative across corporate Australia. The Reserve Bank of Australia’s latest Statement ...Read more
Banking
Open banking, real returns: How an Australian brokerage turned CDR data into deal velocity
Open banking is no longer a whiteboard theory—it’s a working growth engine. This case study unpacks how a mid-sized Australian brokerage (“Pink Finance”) operationalised Consumer Data Right (CDR) data ...Read more
Banking
Open banking’s quiet revolution: how one broker’s data play rewrites speed, trust and margin
Open banking is shifting from compliance cost to commercial engine, and early adopters in Australia’s broking market are already monetising the curve. The playbook: consented bank-grade data piped ...Read more
Banking
ANZ’s company-borrower mortgage clampdown: a risk reset with wide spillovers for SMEs, investors and non-banks
ANZ has tightened credit settings for home loans where the borrowing entity is a company — a narrow policy change with broad commercial consequences. It signals a shift in risk appetite across ...Read more
Banking
CBA’s investor-loan win signals a new phase in Australia’s mortgage machine
Commonwealth Bank’s outperformance in investor mortgages isn’t just a leaderboard moment; it’s a proxy for who owns the next growth leg in a broker‑led, increasingly digital mortgage marketRead more
Banking
A divided Big Four signals a two-track 2026: how to profit from rate uncertainty
Australia’s largest banks can’t agree on where the cash rate lands in 2026 — a split that matters more than the number itself. When the price of money is ambiguous, strategy becomes a game of ...Read more
Banking
Brokers own the mortgage funnel: Why a 77% share is reshaping bank strategy in Australia
Australia’s mortgage market has quietly consolidated around one gatekeeper: the broker. With brokers facilitating roughly 77% of new home loans, distribution power has migrated from bank branches to ...Read more
Banking
Commonwealth Bank leads consideration while People First Bank tops satisfaction in YouGov’s latest rankings
In a revealing snapshot of Australia's banking landscape, the Commonwealth Bank (CBA) has emerged as the most considered financial institution among prospective customers, according to YouGov's ...Read more
Banking
End of the easing: what a major bank’s call signals for Australian balance sheets
A major Australian bank now argues the Reserve Bank’s rate-cut run has hit a pause, resetting the risk-free rate narrative across corporate Australia. The Reserve Bank of Australia’s latest Statement ...Read more
Banking
Open banking, real returns: How an Australian brokerage turned CDR data into deal velocity
Open banking is no longer a whiteboard theory—it’s a working growth engine. This case study unpacks how a mid-sized Australian brokerage (“Pink Finance”) operationalised Consumer Data Right (CDR) data ...Read more
Banking
Open banking’s quiet revolution: how one broker’s data play rewrites speed, trust and margin
Open banking is shifting from compliance cost to commercial engine, and early adopters in Australia’s broking market are already monetising the curve. The playbook: consented bank-grade data piped ...Read more
