Powell could send markets tumbling if he doesn't signal a rate cut today

• Market bets on 0,25% cut next month
• Fed remains cautious on persistent inflation
• Bond yields remain steady awaiting

Investors are awaiting Jerome Powell's speech this Friday at Jackson Hole, where the Federal Reserve chairman may indicate interest rate cuts as early as September. The market assigns a 70% chance of a 0,25 percentage point cut and projects 50 basis points of easing in 2025.

Some analysts, however, believe Powell will adopt a more cautious tone. Jason Pride of Glenmede assesses that he "won't want to set a rate-cutting path for a September decision," even though he acknowledges signs of an economic slowdown. Tom di Galoma of Mischler Financial, meanwhile, states that "there's a good chance of more aggressive pressure and that the president won't be inclined to cut rates."

The decision is likely to depend on the upcoming employment and inflation reports, expected in early September. For now, bond yields remain stable, with the two-year bond at 3,75% and the ten-year bond at around 4,30%.

Although the labor market is showing signs of weakness, inflation remains a concern. The Fed's July minutes revealed concerns about further price increases following additional tariffs. Therefore, the monetary authority kept interest rates unchanged, awaiting greater clarity on inflation behavior.

Strategists at BMO Capital Markets emphasize that the reaction to Powell's speech will be crucial. They believe any sign of moderation could boost short-term bonds, while a firmer stance could lead investors to revise bets on immediate cuts.

At the time of publication, the price of Bitcoin was quoted at US$113.134 with a drop of 0,6% in the last 24 hours.