Surprises at Jackson Hole Unlikely

Don't expect too many surprises from Federal Reserve chairman Jerome Powell's speech at the annual Jackson Hole Economic Symposium.

Powell will deliver his much-anticipated remarks Friday at 10 a.m. New York time. The symposium provides the chairman an opportunity to comment in broad strokes on the current economic picture, uncertainties and risks and the Fed's baseline outlook for the future. He will likely discuss inflation and inflation expectations and given the title of this year's symposium, "Reassessing Constraints on the Economy and Policy," he may mention supply and labor constraints.

He is unlikely to unveil any brand-new monetary policy directives, to commit to any exact numbers for future rate hikes or the terminal rate nor to signal a huge pivot in current policy.

Several Fed members have spoken this week providing an overall message that the Fed's number-one directive is to bring down inflation and that the magnitude of the rate hike at the Fed's meeting in September will depend on the data.

Last year in his Jackson Hole speech Powell said that it “could be appropriate to start reducing the pace of asset purchases,” a move that had already been widely choreograph by the Fed and he did not suggest any specific timing nor amounts. The markets took his comments in stride and the S&P 500 index closed up by 0.9% on the day.