Jackson Hole pushback unlikely to stop a September Fed rate cut

Federal Reserve Chair Jerome Powell will take the stage at Jackson Hole on Friday determined to cool talk of a September rate cut, one is coming, predicts the CEO of one of the world’s largest independent financial advisory and asset management organizations.

Nigel Green of deVere Group argues that the US central bank will move by 25 basis points next month despite the chair’s expected caution.

“Powell will try to steady the market narrative in Jackson Hole,” says the deVere chief executive.

“He doesn’t want to give the impression that the Fed has already signed off on a cut. But when you strip away the rhetoric, the evidence is compelling. We believe that rates are coming down in September.”

The labour market has delivered a stunning reversal. July payrolls added only 73,000 jobs, missing forecasts of 100,000.

More damaging were the revisions: more than 250,000 positions erased from May and June totals, leaving those months essentially flat.

The unemployment rate has ticked up to 4.2%. Treasury yields fell across the curve as investors repriced the outlook, and futures markets now imply a two-thirds chance of easing next month.

Nigel Green notes: “The revisions show that the jobs engine is far weaker than policymakers thought. The Fed has been making decisions based on numbers that no longer stand. This forces a rethink. The momentum is clearly shifting, and it justifies fresh action.”

Inflation has meanwhile undershot forecasts. Price data is cooling rather than re-accelerating, offering the Fed cover to pivot.

The Atlanta Fed’s GDPNow tracker is pointing to softer growth. Together, weakening employment and easing inflation have transformed the policy debate.

Traders now see the September meeting as live, with growing chatter of a half-point cut even if the consensus is for 25 basis points.

Powell faces a “communication challenge” in Wyoming, says deVere’s CEO.

Central bankers avoid boxing themselves in, and the chair will emphasise flexibility. But markets react to tone as much as substance. If investors hear a flat rejection of imminent easing, risk assets could wobble. If he confines himself to guarded caution, expectations of a cut will remain embedded.

“Nobody should expect Powell to give Wall Street a green light at Jackson Hole,” says Nigel Green.

“He’ll hedge, he will stress the importance of upcoming data, and he will underline that the committee is not united. But the truth is that the jobs market has delivered the Fed the evidence it needs. The Fed cannot ignore that without damaging its credibility.”

Pressure is also coming from outside the Fed. President Trump has been vocal in his demand for lower borrowing costs, and Treasury Secretary Scott Bessent has echoed those calls.

The central bank insists on independence, but political noise is shaping perceptions. Powell will be navigating those “cross-currents” in his remarks, even as he tries to anchor expectations.

Nigel Green believes investors should prepare for the policy turn.

“The first move is always the most important,” he says.

“It triggers rotation across markets. Tech and growth stocks are likely early beneficiaries, and emerging markets could attract inflows as the dollar softens. Bond markets are already adjusting, and we are likely to see more volatility as positioning builds.”

What happens in Jackson Hole will shape sentiment in the run-up to the September 16–17 FOMC meeting. Powell will likely push back, but the numbers are doing the talking.

Nigel Green is unequivocal: “The Fed can deliver tough talk in Wyoming, but the hard data will drive policy.

“Powell can push back all he likes this week – but we predict that in September, the Fed will cut by 25 basis points.”