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Markets focus on Jackson Hole symposium as Fed faces pressure to cut
Markets are squarely focused on this week’s Jackson Hole symposium, where central bank officials will provide guidance on growth, inflation and the potential pass-through from recently imposed tariffs. A September rate cut remains the base case, but investors want clearer signals on how aggressive the Federal Reserve is prepared to be.
U.S. markets await the Jackson Hole Symposium for policy guidance.
The Federal Reserve faces growing pressure to ease amid rising stagflation concerns.
The Trump–Zelenskiy meeting raised the prospect of a broader U.S.–Russia–Ukraine summit.
Major U.S. retailers report quarterly earnings this week.
U.S. equities little changed ahead of Jackson Hole
The S&P 500, Nasdaq and Dow Jones ended the session largely flat as investors waited for remarks from global central bank officials at the Jackson Hole Symposium (21–23 August). Fed Chair Jerome Powell’s speech will be the key event, with markets looking for updated views on inflation and the likely impact of U.S. tariffs on the growth outlook.
Fed weighs inflation and employment
Markets are currently pricing in at least a 25-bp cut at the September FOMC meeting, with softer labour-market data raising the probability of a larger 50-bp move. The Fed’s dual mandate is increasingly pulling in opposite directions: loosening policy too early could reignite inflation, but staying restrictive for too long risks further damage to the labour market.
Stagflation concerns are also rising. According to BofA Global Research, 70% of surveyed investors expect a stagflationary environment in the coming months (Reuters, August 2025), driven by weaker jobs data, higher core inflation and a sharp rebound in producer prices.
Oil and dollar rise after Trump–Zelenskiy meeting
Presidents Donald Trump and Volodymyr Zelenskiy met to discuss the Russia–Ukraine conflict, though no concrete agreements were reached. Trump said the U.S. would support European efforts to secure Ukraine’s safety and floated the idea of a trilateral summit with Vladimir Putin. He also urged Ukraine to drop its bid to retake Crimea and pause its NATO aspirations — positions broadly viewed as unfavourable to Kyiv.
Brent and WTI crude prices rose about 1%, on confidence that fresh diplomatic efforts could ultimately normalize Russian supply. The U.S. Dollar Index also gained roughly 0.40% on improved geopolitical sentiment.
Retail earnings in focus
Investors will monitor quarterly results from Walmart, Home Depot and Target this week. Beyond company-specific performance, the numbers may offer insight into whether tariff-related price pressures are beginning to influence consumer behaviour. Confidence has weakened over the past year, but retail spending has yet to show a material slowdown that would suggest outright revenue contraction.
Key economic releases this week
Tuesday
- New Zealand: Monetary policy decision
- Australia: Consumer confidence
- U.S.: Building permits
- Canada: Inflation rate
- Japan: Trade balance
Wednesday
- U.K.: Inflation rate
- Eurozone: Inflation rate
- U.S.: Crude oil inventories
- U.S.: Fed minutes
Thursday
- Jackson Hole Symposium
- Germany: Manufacturing PMI
- U.K.: Services PMI
- U.S.: Manufacturing PMI
- U.S.: Existing home sales
- Japan: Inflation rate
Friday
- Jackson Hole Symposium
- U.K.: Retail sales
- U.S.: Jerome Powell press conference
