Federal Reserve Chair Jerome Powell will deliver a keynote address at the annual Jackson Hole event on Friday at a crucial time as the economy anticipates the central bank's next interest rate cut and as his tenure at the helm of the Fed winds down. Powell's speech in the spotlight at Jackson Hole is expected to be his last as Fed chair, as his term expires in May 2026 and President Donald Trump is vowing not to reappoint him to the role. Trump appointed Powell to the role in 2017. His term as a Fed governor extends into 2028, though Powell hasn't said whether he'll continue to serve after his chairmanship. The chair's keynote address also comes at a time of uncertainty for the U.S. economy. While the labor market has remained near full employment, the July jobs report was weaker than expected and downward revisions to employment in May and June showed job creation nearing a stall speed. Inflation has come down markedly from the 41-year highs seen in 2022, but has trended higher in recent months as more tariffs take effect and cause a rise in consumer prices. Powell may use the opportunity presented by his annual speech at the Kansas City Fed's monetary policy conference to signal to the market how he views the latest data and whether rate cuts will resume in September, after he employed a similar tactic last year. TREASURY'S BESSENT SAYS INTERVIEWS FOR POTENTIAL FED CHAIRS WILL START AROUND LABOR DAY In his August 2024 speech, Powell said the Federal Reserve would begin cutting interest rates at its next meeting in September. He explained that, "The time has come for policy to adjust," adding that the "direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks." The Fed ultimately cut interest rates by 50-basis-points in September 2024, then tacked on 25-basis-point cuts in November and December. However, policymakers have left the benchmark federal funds rate unchanged at a range of 4.25% to 4.5% at all five of their meetings in 2025 amid uncertainty over the impact of tariffs on inflation and the durability of the labor market.
