Powell instead could provide some background for the public and markets to understand how the Fed will respond as the economy evolves
“I don’t think he needs to do a lot beyond the press conference in July”, said Richard Clarida, a former Fed vice chair who is now global economic adviser for Pimco, referring to how Powell leaned strongly toward a rate cut at the Sept. 17-18 meeting in remarks to reporters after the July 30-31 meeting.
“You will not get ‘mission accomplished'”, Clarida said, “but he might look back at the last two years, where we were and where we are, and acknowledge that they are close” to taming the worst outbreak of inflation in 40 years.
Powell will take the podium at 10 a.m. EDT (1400 GMT) in a remote lodge in Wyoming’s Grand Teton National Park to address a gathering that has become a global platform for central bank officials to shape views of monetary policy and the economy.
With one exception, the six speeches Powell has delivered to the conference since becoming Fed chief in 2018 have been largely explanatory, designed less to influence short-term policy expectations than to lay out how officials were thinking about major structural issues or, since the start of the Covid-19 pandemic, detailing the mechanics of inflation.
The exception was in 2022 as the Fed fought to keep public expectations about high inflation in check: Powell delivered a terse, market-moving address meant to convey his seriousness about defending the central bank’s 2 per cent inflation target. Some called it his “Volcker moment”, a reference to Paul Volcker, the Fed chief who triggered a recession in the early 1980s with punishing interest rates to break an inflationary cycle.
That’s a consequence the Powell Fed has dodged – so far.
