KVB: The world is focused on Powell's blockbuster speech on Friday, potentially putting Wall Street's hopes of a September rate cut in jeopardy.

KVB has noticed that the spotlight in global financial markets is now fixed squarely on one key figure: Federal Reserve Chairman Jerome Powell. On August 22nd at 10:00 AM (PT), he will deliver a speech at the annual central bank symposium in Jackson Hole, Wyoming. This speech has long been seen as a bellwether for the industry, stirring the nerves of countless investors and policy observers.

The Jackson Hole central bank symposium, an annual event, has always been a crucial platform for central bank governors and senior officials to discuss and exchange views. It serves not only as a venue for academic exchange but also as a crucial window for policy signals. Historically, many far-reaching monetary policy adjustments can be traced back to speeches or hints made at this conference.

At this time last year, it was Powell himself, in this historic land, who delivered a crucial signal to the world: the time was ripe for a Fed policy adjustment. He expressed growing confidence that inflation was steadily returning to a sustainable 2% level. This statement was widely interpreted by the market as a prelude to a cycle of rate cuts.

However, times have changed, and this year's situation appears more complex and fluid. Based on the current economic environment and policy dynamics, many financial institutions and analysts on Wall Street generally expect the Fed to resume its rate cuts at its September meeting. This expectation stems from the delicate balance of the US economy under the impact of the Trump administration's tariff policies.

For months, faced with the uncertainty brought on by trade tensions, the Fed has opted to remain on hold, holding interest rates steady while observing further developments in economic data. At the same time, however, direct and indirect pressure from the White House and Trump himself for looser monetary policy to stimulate economic growth, coupled with the arrival of a new governor known for his dovish stance, have combined to fuel expectations of a rate cut.

Nevertheless, Powell appears reluctant to easily signal a policy shift at the upcoming Jackson Hole meeting. This is partly because market expectations for a September rate cut aren't entirely without controversy. For one thing, while overall inflation has declined, it hasn't yet steadily fallen below the Fed's 2% target. In particular, the impact of recent tariffs on imported goods is gradually becoming apparent, adding uncertainty to the inflation outlook.

On the other hand, economists are engaged in a heated debate over the recent performance of the labor market: Does the slowdown in job growth reflect weakening business demand for labor or supply constraints? If the latter is the root cause, further rate cuts would fail to effectively boost employment and could exacerbate inflationary pressures, undermining the Fed's dual mandate of promoting maximum employment and maintaining price stability.

Michael Pearce, deputy chief U.S. economist at Oxford Economics, noted in a recent research report: "The impact of tariffs is permeating the economy unevenly and is expected to continue to push up inflation in the coming months. It will be challenging for policymakers to separate the temporary volatility caused by tariffs from more persistent inflationary pressures."

Based on this assessment, Pearce believes that unless there is strong evidence of a significant slowdown in economic activity, particularly a sharp decline in the August jobs report, the Federal Reserve is likely to hold interest rates steady until at least its December meeting.