Fed chair strikes a balanced tone at Jackson Hole, leaves September door open
The Fed chair avoided pre-committing to a September move but acknowledged growing risks to the labour market, a shift markets read as mildly dovish.
The Federal Reserve chair used Friday's keynote address at the Jackson Hole symposium to strike a carefully balanced tone, stopping short of pre-committing to a September rate cut while acknowledging that risks to the labour market have grown.
Policy is 'well positioned' to respond as new data arrives, the chair said, repeating language markets have come to associate with a central bank preparing the ground for a move rather than ruling one out.
The remarks were read as mildly dovish overall. Traders kept the probability of a quarter-point September cut above 80% in the futures market, largely unchanged from levels seen earlier in the week.
Equity markets took the speech in stride, with major US indices edging higher into the close, while the dollar index held close to its recent lows against a basket of peers.
Key Takeaways
- The Fed chair described policy as 'well positioned' to respond to incoming data.
- Labour-market risks were flagged more prominently than in recent statements.
- Markets kept September rate-cut odds above 80% following the remarks.
- The dollar index held steady near recent lows, with equities ticking higher.
Stay Ahead of the Market
Get daily forex news, technical analysis and broker insights delivered straight to your inbox.