Episode summary
Instant Reaction: Jay Powell's Jackson Hole Speech | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Tom Keene, Lisa Abramowicz · Guests: Jim Bullard, Kate Moore, Richard Clarida
Summary
Jerome Powell used Jackson Hole to signal that the Federal Reserve is edging toward a September rate cut, with labor-market weakness now carrying more weight than the inflation risk from tariffs. The panel’s read was that Powell did not commit to a series of cuts, but did enough to solidify expectations for a 25 basis point move next month and to frame policy as still restrictive but closer to adjustment.
Former St. Louis Fed president Jim Bullard said the speech matched market expectations and reflected the committee’s center of gravity. He argued the Fed can ease gradually while remaining moderately restrictive, and said the argument for looking through the one-time tariff shock in goods prices is carrying the day. Bullard also said the dot plot should be replaced with a more disciplined quarterly report.
Kate Moore said markets like certainty and warned that any change in the Fed’s process or perceived independence could create volatility. Rich Clarida said Powell clearly prioritized the labor market as the first-order risk and signaled that persistent inflation is not the main concern. Both noted that tariff effects may be visible in prices, but that markets are increasingly treating them as manageable rather than a renewed inflation regime.
Key takeaways
- Jim Bullard said Powell’s speech effectively locked in expectations for a 25 basis point cut in September.
- Bullard argued the Fed can cut slowly and still keep policy moderately restrictive enough to pressure inflation lower.
- Kate Moore said changes to Fed process or independence would likely trigger volatility even if policy stays data-dependent.
- Rich Clarida said Powell highlighted weakness in the labor market as the bigger risk, not persistent inflation.
- Bullard said the committee appears willing to look through the one-time tariff hit to goods prices and focus on anchored inflation expectations.
Notable quotes
“he used the the uh speech to uh solidify expectations for 25 basis points in September”
“the balance of risk to the labor market is to a weaker labor market”
“the chair certainly intended to open the the door pretty wide to cutting uh in uh uh September”
“the Fed has to focus on getting price stability because that's going to deliver uh the ability to deliver maximum uh uh employment”
“I think the chair was was right to point out that we are seeing evidence of tariffs showing up in the price indexes”
How the episode opens
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Eastern on Apple CarPlay or Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Joining us now is someone who is very familiar with these types of uh speeches, St.
Louis Fed President James Bullard, who recently was in the media talking about his preference for a 100 basis points of rate cuts this year heading into 2026. also a potential contender, I should say, to be the next Fed chair. Uh, James, Jim, how much are you seeing what we heard from Fed Chair Jay Powell and seeing anything different that you would really say if you were at that podium?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- fed rate cut september
- jackson hole symposium
- labor market risks
- inflation outlook
- fomc meeting sept 16-17
Companies and tickers mentioned
- C
- Citigroup
Watch the episode
Watch “Instant Reaction: Jay Powell's Jackson Hole Speech | Bloomberg Intelligence” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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