Global Highlights This Week: Fed Releases ‘Split Minutes,’ Powell Appears at Jackson Hole Conference
This week, global investors will turn their attention to Jackson Hole, Wyoming, where the Federal Reserve will hold its annual policy symposium and provide new clues on future rate cut paths.
According to the schedule, Fed Chair Jerome Powell will deliver a speech at 10:00 PM Beijing time on Friday.
Besides the economic outlook, this year he will also address the five-year review of the Fed’s policy framework. Powell has previously indicated that the policy review could be completed and results announced in August or September.
The Fed’s current policy framework stems from the 2020 revision, with the most criticized aspect being the “asymmetric average inflation target”—a policy allowing inflation to exceed the 2% target for a period under low-interest-rate conditions. Critics argue that the Fed’s slow response to the last inflation surge was hampered by this framework.
Given that Powell’s Jackson Hole speech in 2022 triggered a sustained sell-off in U.S. stocks, no investor dares to underestimate this typically 10-minute address.
(Source: TradingView)
Powell’s speech coincides with the U.S. stock market sprinting to new highs under the consensus of a September rate cut. Combined with recent weak employment data and an unusual PPI surge, investors will closely monitor any statements he makes about the monetary policy path.
Andrew Slimmon, head of the applied equity advisory team at Morgan Stanley Wealth Management, noted that stocks benefiting from rate cuts recently rank among the biggest winners in the U.S. market, such as homebuilders, cyclical stocks, industrials, and materials companies.
He added: “The more I see residential builder stocks rebound, the more I feel the market expects a Fed rate cut. This means any hint at Jackson Hole that this won’t happen could easily trigger a sell-off.”
Before the key speech, the Fed will release the minutes from its last policy meeting on Thursday. Given the unprecedented occurrence in July—since 1993—of two Fed governors voting against the decision, the document’s wording will be under intense market scrutiny.
This week’s economic data, however, is relatively quiet.
August PMI data for the U.S., eurozone, and several European countries will be released this week, offering the latest guidance on how tariffs are impacting the global economy.
The UK will disclose July CPI data; if inflation exceeds expectations, the already deeply divided Bank of England may pause its rate cuts.
Just as markets begin speculating about a potential early rate hike by the Bank of Japan, the country will release its latest inflation data on Friday.
On the earnings front, U.S. stock markets this week will see a wave of retailer earnings reports. As industries directly hit by tariffs and facing U.S. consumers, their descriptions of tariff impacts will be closely watched. Additionally, a group of Chinese investors familiar with Chinese ADRs will see earnings from several prominent stocks.
On the tech giant front, Google will hold a new product launch event at 1:00 AM Beijing time on Thursday, unveiling multiple smartphones. Although Google holds a modest share of the phone hardware market, as an AI industry leader, it is expected to showcase cutting-edge AI features for Android phones ahead of Apple’s September event.
Before all the aforementioned events unfold, global markets will closely monitor developments in geopolitics. Following Friday’s U.S.-Russia leaders’ meeting, Ukrainian President Zelensky will visit the White House again on Monday.
As of press time, significant differences remain between Zelensky and Trump on the critical issue of a Russia-Ukraine ceasefire.