• In today’s Comment we will preview Jackson Hole and give a bird’s eye overview of US markets, the economy, inflation, and QT. Now, in normal times, one might expect the Fed Chair to give guidance on where monetary policy is headed: a numerical target, a vaguer verbal target, or simply calendar-based guidance on the Next Big Thing in monetary policy. But these aren’t normal times, and one should expect Powell to refrain from revealing anything beyond what we already know: Powell & Co judge the Fed’s monetary stance to be around neutral. And with the Fed having reached that milestone, the pace of rate hike increments could be dialed down. A full-blown pivot is only an option if there is a consecutive string of positive inflation surprises, and if Powell & Co can reasonably expect that inflation is headed towards 2 percent.


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