Institutional Review of the Jackson Hole Conference: Tardy Hawkishness, Reputation Restoration

BlockBeats News, August 29th, the People's Bank of China article stated that Federal Reserve Chairman Powell's speech at Jackson Hole was hawkish: he acknowledged that inflation remains high, clarified that interest rates are still the primary policy tool, and stated that he will "take action as needed based on the situation"; at the same time, based on economic resilience, stable employment, and loose financial conditions, he indicated that the current policy risks are more skewed towards inflation.

He also attributed the responsibility for 65 months of overshooting inflation to the central bank itself, correcting the vague statement in July about "letting the market instead of the Fed raise interest rates." The People's Bank of China believes that this speech helps rebuild the Fed's credibility, and after the speech, the market has started to trade the marginal repair of policy credibility. In the long term, Powell still insists that AI may reshape the economic and policy framework and continues to promote reform agendas such as reducing forward guidance.

For the market, this statement has raised the probability of a Fed rate hike this year, but even so, it may not necessarily be purely bearish. The current market is not lacking in liquidity; what is lacking is policy discipline and predictability. As long as inflation can be promptly contained, it is actually favorable for the market in the medium term. (FXStreet)