The Jackson Hole Economic Policy Symposium in the United States is set to take place from August 21 to 23, attracting the attention of the global financial community. Fed Chairman Powell's speech is undoubtedly the focal point of this meeting, and his remarks will have a profound impact on global financial markets.

Currently, the market widely expects the Fed to cut interest rates in the near future, and this expectation has pushed the stock prices of interest rate-sensitive sectors to historic highs. However, if Powell's speech content contradicts market expectations, it could trigger severe fluctuations in the financial markets. At present, the federal funds futures market shows a probability of over 92% for a 25 basis point rate cut in September, and the market strongly anticipates another rate cut within the year.

Powell is facing tremendous political pressure this time. He needs to clarify his stance through this speech while defending the independence of the Fed. This is not only related to the credibility of the Fed but also to avoid repeating the mistakes of the 1970s, when political interference led to high inflation.

However, the current economic data is mixed, making decision-making more complex. On one hand, the significant increase in the core CPI and PPI in July indicates that inflationary pressures still exist; on the other hand, the labor market is starting to cool down, and the employment data is not very ideal. Lowering interest rates may exacerbate inflationary pressures, while maintaining the current interest rate level may further weaken the job market.

Industry insiders expect that Powell may not directly reveal the interest rate decision for September in this speech. Instead, he is likely to focus on the evaluation of the monetary policy framework that occurs every five years. By adjusting the policy framework, such as changing the wording that describes employment conditions, Powell hopes to establish long-term guiding principles for the Fed to balance full employment with price stability. This move is also seen as a key step for Powell in defending the independence of the Fed.

In any case, this Jackson Hole meeting will undoubtedly become an important barometer affecting the direction of global financial markets. Investors and policymakers will closely watch every word from Powell in hopes of gleaning clues about the future monetary policy of the United States.