Unlike last year's fire and brimstone last-minute-revised speech, when the Fed found itself flailing to catch up with runaway inflation, most economists don’t expect Powell to send strong signals about the near-term policy path during his Jackson Hole speech Friday morning.
Instead, as Standard Chartered's Steve Englander writes, at Jackson Hole Powell "may want to send a message of policy continuity rather than a warning on future policy tightening as at the last few conferences." However, with inflation and activity likely slowing he may see the sharp move at the long end of curve, unrelated as it is to policy expectations, as opening up more downside risk to asset markets than is needed now. As such, while Powell will likely avoid any indication that he is targeting long rates, he may send a sufficiently ambivalent message on long yields, along with the usual anti-inflation mantra, to weaken the USD and notch down yields. The question is whether such comments will be enough in light of concerns elsewhere to reverse recent trends.
Here are some more details on what to expect from the Fed chair this year.