Ireland 
USA Hawkish Powell speech at Jackson Hole knocks S&P 500
This afternoon US Federal Reserve Chair Jay Powell made his annual address at the Jackson Hole economic policy symposium. In a short and succinct address, Powell reiterated the hawkish tone that we’ve heard in recent months. The full speech can be found here.
Rob Clarry, Investment Strategist at wealth manager Evelyn Partners, highlights Powell’s closing remarks: “We are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored. We will keep at it until we are confident the job is done.”
Clarry comments:
“Powell reinforced the messages we’ve heard over summer including:
- The Fed’s responsibility to delivering price stability is unconditional.
- Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy.
- While the lower inflation readings for July are welcome, a single month's improvement falls far short of what the Committee will need to see before they are confident that inflation is moving down.
“All of this points towards the Fed continuing to tighten policy and, in our view, makes a dovish pivot unlikely in the near term.
“The market reaction to the speech has been fairly volatile. The S&P500 is down 1.9% at the time of writing, while the probability of a 75 bps hike at the September meeting has increased to over 50%.
“A Fed ‘pivot’ now looks very unlikely in the near term.”