Washington Makes Jackson Hole Debut This Friday, Wall Street Hopes for a Treasury Bond "Painkiller"

BlockBeats News, August 24th. Federal Reserve Chair Powell will make his first appearance as chair at the Jackson Hole central bank symposium this Friday. The market is expecting him to further explain the policy framework following a significant cut to forward guidance in order to ease recent tensions in the U.S. bond market.

Prior to this, Powell reduced guidance on the future interest rate path during policy communications, and even hinted at a possible adjustment to the inflation target, raising concerns in the market about the Fed's transparency and policy credibility. Surveys show that over 60% of surveyed economists believe that the Fed's credibility crisis has had a significant impact on the surge in long-term U.S. bond yields.

Meanwhile, Treasury Secretary Yellen is attempting to lower borrowing costs by expanding the scale of longer-term U.S. bond repurchases, while Powell seems to tacitly approve of the rise in long-term yields, leading the market to pay attention to the policy divergence between the Fed and the Treasury.

Analysts warn that if Powell fails to provide a clear policy signal on Friday, it may be seen as "disappointing" by the market, further exacerbating the sell-off in long-term U.S. bonds. If he can clearly define potential inflationary pressures, it is expected to reduce term premiums and ease bond market pressures.