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Jackson Hole not likely to offer much but Fed on track to cut in September – ANZ

ANZ notes that Fed chair Powell’s speech will be closely watched for any signals about policy easing. Adding that markets will also be eyeing on changes to the policy framework review. There is some anticipation that the Fed will reaffirm a move away from flexible average inflation targeting and towards a fixed 2% target in the medium-term.

But with the focus on the symposium being on the labour market, Powell could offer some minor hints on September by reinforcing the risks surrounding jobs and employment conditions. However, his comments are likely not going to be definitive and explicitly confirm expectations of a move next month.

As for the Fed decision in September, ANZ argues that tariffs inflation is going to be transitory and that will set the central bank up to cut rates by 25 bps. Once that happens, the firm expects it to kick off a gradual easing cycle by the Fed.

This article was written by Justin Low at investinglive.com.

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