The annual symposium of central bankers called Reassessing the Effectiveness and Transmission of Monetary Policy was held in Jackson Hole, Wyoming, an event that ends on Saturday, August 24, 2024.
The spotlight was on the speech by Jerome Powell, chairman of the Federal Reserve.
Many analysts had anticipated it on social media and in the news, as was predictable to everyone, the FED has an interest rate cut in store for the next FOMC. The estimated cut should be at least 25 basis points and will be an "experiment" to evaluate the response of the markets and the economy, based on the reaction it will be decided whether to continue with the cuts or keep them stable for an unspecified period.
Patrick Harker, president of the Philadelphia FED, has already spoken out by declaring that "we must begin the process of lowering interest rates in September". During the meeting, a large majority of FOMC members were in favor of a cut in rates.
So Powell did nothing but definitively confirm the upcoming cuts, stating that the time is now ripe to start the season of cuts. However, he did not give any date, so September remains a very probable choice, but not 100% certain.
It is also estimated that the frequency and extent of the cuts will be very cautious and will require a lot of patience, as the reaction of the markets and the economy in particular is still uncertain.
The news, however, is to be considered more than positive despite the necessary caution. September 19 and 20 are the dates to mark on the calendar, dates on which the next FOMC meeting and the decision on interest rates will take place.
Let's cross our fingers!
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