• Notes from the Desk | Jackson Hole

Notes from the Desk | Jackson Hole Aug 25 2023

Notes From The Desk – Jackson Hole


Fed Chair Jerome Powell mostly stayed on message but opined on recent data points.

Notable Notes


  • Fed remains concerned about inflation reaccelerating, noting uncertainty around the durability of the recent low inflation readings
  • Implications that the economy may not be cooling as much as they hoped
  • Labour markets still need to soften for inflation to fall
  • The lags for monetary policy to work might be longer than initially expected
  • Fed is NOT changing their 2% inflation target; bodes well for long yields
  • Fed is aware the neutral rate might be higher than they think; higher than 2.5%
  • The committee is prepared to hike further if needed



Although short rates may move higher, long rates should remain fairly stable.  In aggregate, rate moves should not be too significant.

With a look to the upcoming jobs and CPI report, the September FOMC meeting ‘remains live’ with a small chance of a hike priced in currently by the market.

Markets should not be optimistic that rate cuts are around the corner.

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