Investors expect Jackson Hole Fed seminar for evidence on interest rate cuts
Date
8/21/2024 8:55:24 AM
(MENAFN) Investors are closely watching the Federal Reserve's economic policy symposium, scheduled to take place in Jackson Hole, Kansas City from August 22 to 24. The event is highly anticipated as market participants seek insights into the timing of a potential interest rate cut in the U.S., especially given recent economic volatility and shifting data. The symposium comes on the heels of a notably weaker U.S. jobs report from early August, which sparked concerns about a possible recession and led investors to speculate on a forthcoming rate cut. However, subsequent data, including a slowdown in inflation and a robust retail sales report, have moderated expectations, reducing fears of a substantial 0.5 percentage point cut in September.
Mark Cabana, head of U.S. interest rate strategy at Bank of America, suggested that the Federal Reserve might indicate a potential rate cut at the Jackson Hole meeting, contingent on continued progress in controlling inflation. He noted that while the Fed might not commit to a large cut, it will likely avoid dismissing the possibility of one if economic conditions warrant it. The next Federal Reserve rate decision is set for September 18, with markets currently anticipating three to four quarter-point reductions in the current rate range of 5.25 percent to 5.5 percent, which is the highest level in 23 years.
In addition to U.S. economic signals, investors are also keenly observing business activity surveys from the eurozone. The S&P Global Purchasing Managers' Index (PMI), a key economic indicator, is expected to stay above the critical 50 mark, indicating a slight improvement from the previous month’s reading of 50.1. According to survey, the index is forecasted to maintain this level, while economists predict a small rise to 50.3. This data will be closely watched for insights into the eurozone’s economic health.
MENAFN21082024000045015682ID1108585024
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.