One last time since President Donald Trump nominated him to lead the U.S. central bank in late 2017, Federal Reserve Chair Jerome Powell on Friday will walk through the Jackson Lake Lodge's expansive lobby, past the taxidermied grizzly bear, and into a ballroom lighted with elk-antler chandeliers to deliver a speech at the global central bankers' influential symposium in Wyoming. In his seven previous Jackson Hole speeches, Powell has touched on a range of issues, from esoteric economic concepts and monetary policy history lessons to pledges of policy support through the COVID-19 pandemic and the central bank's determination to win the inflation war that followed.
Each speech, too, has included some measure of preview for the Fed's next interest rate moves, and that above all else is why Powell will have the world's attention at 10 a.m. EDT (1400 GMT) on Friday.
Here is what he has previously said, and what happened next:
2018: STARS AND RATE HIKES AHEAD
Powell's first - and longest - Jackson Hole speech set out his approach to policymaking, focused on "navigating by the stars" - the economics world's shorthand for concepts like the natural rate of unemployment and neutral interest rate. He did, though, offer a view on what was coming down the pike.
What Powell said: "Let me conclude by returning to the matter of navigating between the two risks I identified - moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating. ... I see the current path of gradually raising interest rates as the FOMC's approach to taking seriously both of these risks." What the Fed did: Following the two quarter-percentage-point rate hikes in the first half of the year, the central bank's policy-setting Federal Open Market Committee delivered two more quarter-percentage-point hikes before the end of the year.
2019: TRUMP TARIFFS 1.0 AND RATE CUTS
Part history lesson and part dissection of the trade policy moves in Trump's first term in the White House that were starting to blur the outlook, Powell's 2019 speech was met within hours by the U.S. president asking on social media "who is our bigger enemy" - Powell or Chinese leader Xi Jinping?
What Powell said: "We have been monitoring three factors that are weighing on this favorable outlook: slowing global growth, trade policy uncertainty, and muted inflation. ... we will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective." What the Fed did: It followed a quarter-percentage-point rate cut that July with two more such reductions in borrowing costs in September and October, far less than what Trump had demanded. Then the pandemic arrived, and everything changed.
2020: 'INCLUSIVE' EMPLOYMENT, AVERAGE 2% INFLATION
Delivered remotely because of the pandemic, Powell's speech in 2020 laid out a new approach to policy that placed greater weight on defending the Fed's employment mandate.
What Powell said: "Our revised statement emphasizes that maximum employment is a broad-based and inclusive goal. ... Employment can run at or above real-time estimates of its maximum level without causing concern, unless accompanied by signs of unwanted increases in inflation or the emergence of other risks that could impede the attainment of our goals. ... Following periods when inflation has been running below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time."
What the Fed did: In September it adopted a new three-part test, seen at the time as an outgrowth of the new framework, for raising interest rates: the attainment of maximum employment and 2% inflation, and indications that inflation will "moderately exceed 2% for some time." The promise helped support the economy's recovery from the pandemic shock, but the stringent hurdle for restarting rate hikes was later blamed for slowing the Fed's response to inflation the following year.
2021: NO RATE HIKES NEEDED FOR NOW
In a second straight virtual appearance, Powell dismissed signs of the coming inflation wave as "transitory" - a word he has come to regret ever uttering.
What Powell said: "Current high inflation readings are likely to prove transitory ... If a central bank tightens policy in response to factors that turn out to be temporary, the main policy effects are likely to arrive after the need has passed ... Today, with substantial slack remaining in the labor market and the pandemic continuing, such a mistake could be particularly harmful."
What the Fed did: It began slowing its asset purchases in November and held the policy rate steady at the near-zero level until March 2022. Critics at the time, and most Fed policymakers since, have said the assessment of inflation as "transitory" was a mistake that delayed the start of the rate hikes needed to fight inflation.
2022: RATE HIKES, AND PAIN, AHEAD
Mincing no words in his shortest Jackson Hole speech, Powell made clear the Fed's intent to bring inflation to heel, no matter the pain it might cause.
What Powell said: "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. ... At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. Restoring price stability will likely require maintaining a restrictive policy stance for some time." What the Fed did: It delivered two more 75-basis-point rate increases to follow the two it had done in the meetings before Powell's speech, and then increased the policy rate in smaller increments until it reached the 5.25%-5.50% range in July 2023.
2023: RATE HIKES STILL POSSIBLE
In remarks that were less stern than those delivered the previous year, Powell held out the possibility of more rate hikes while acknowledging the signs of progress in reining in inflation.
What Powell said: "We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data. Restoring price stability is essential to achieving both sides of our dual mandate. ... We will keep at it until the job is done."
What the Fed did: It held the policy rate in the 5.25%-5.50% range, set just weeks before Powell's speech, for a little over a year.
2024: RATE CUTS COMING SOON
Risks had now shifted from inflation to employment, and Powell sent a clear signal that rate cuts were coming.
What Powell said: "My confidence has grown that inflation is on a sustainable path back to 2%. ... We do not seek or welcome further cooling in labor market conditions. ... The time has come for policy to adjust."
What the Fed did: It ended the year-long hold on the policy rate by cutting it by half of a percentage point in September 2024, and by another half a percentage point over the final two meetings of 2024.
Each speech, too, has included some measure of preview for the Fed's next interest rate moves, and that above all else is why Powell will have the world's attention at 10 a.m. EDT (1400 GMT) on Friday.
Here is what he has previously said, and what happened next:
2018: STARS AND RATE HIKES AHEAD
Powell's first - and longest - Jackson Hole speech set out his approach to policymaking, focused on "navigating by the stars" - the economics world's shorthand for concepts like the natural rate of unemployment and neutral interest rate. He did, though, offer a view on what was coming down the pike.
What Powell said: "Let me conclude by returning to the matter of navigating between the two risks I identified - moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating. ... I see the current path of gradually raising interest rates as the FOMC's approach to taking seriously both of these risks." What the Fed did: Following the two quarter-percentage-point rate hikes in the first half of the year, the central bank's policy-setting Federal Open Market Committee delivered two more quarter-percentage-point hikes before the end of the year.
2019: TRUMP TARIFFS 1.0 AND RATE CUTS
Part history lesson and part dissection of the trade policy moves in Trump's first term in the White House that were starting to blur the outlook, Powell's 2019 speech was met within hours by the U.S. president asking on social media "who is our bigger enemy" - Powell or Chinese leader Xi Jinping?
What Powell said: "We have been monitoring three factors that are weighing on this favorable outlook: slowing global growth, trade policy uncertainty, and muted inflation. ... we will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2% objective." What the Fed did: It followed a quarter-percentage-point rate cut that July with two more such reductions in borrowing costs in September and October, far less than what Trump had demanded. Then the pandemic arrived, and everything changed.
2020: 'INCLUSIVE' EMPLOYMENT, AVERAGE 2% INFLATION
Delivered remotely because of the pandemic, Powell's speech in 2020 laid out a new approach to policy that placed greater weight on defending the Fed's employment mandate.
What Powell said: "Our revised statement emphasizes that maximum employment is a broad-based and inclusive goal. ... Employment can run at or above real-time estimates of its maximum level without causing concern, unless accompanied by signs of unwanted increases in inflation or the emergence of other risks that could impede the attainment of our goals. ... Following periods when inflation has been running below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time."
What the Fed did: In September it adopted a new three-part test, seen at the time as an outgrowth of the new framework, for raising interest rates: the attainment of maximum employment and 2% inflation, and indications that inflation will "moderately exceed 2% for some time." The promise helped support the economy's recovery from the pandemic shock, but the stringent hurdle for restarting rate hikes was later blamed for slowing the Fed's response to inflation the following year.
2021: NO RATE HIKES NEEDED FOR NOW
In a second straight virtual appearance, Powell dismissed signs of the coming inflation wave as "transitory" - a word he has come to regret ever uttering.
What Powell said: "Current high inflation readings are likely to prove transitory ... If a central bank tightens policy in response to factors that turn out to be temporary, the main policy effects are likely to arrive after the need has passed ... Today, with substantial slack remaining in the labor market and the pandemic continuing, such a mistake could be particularly harmful."
What the Fed did: It began slowing its asset purchases in November and held the policy rate steady at the near-zero level until March 2022. Critics at the time, and most Fed policymakers since, have said the assessment of inflation as "transitory" was a mistake that delayed the start of the rate hikes needed to fight inflation.
2022: RATE HIKES, AND PAIN, AHEAD
Mincing no words in his shortest Jackson Hole speech, Powell made clear the Fed's intent to bring inflation to heel, no matter the pain it might cause.
What Powell said: "While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. ... At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. Restoring price stability will likely require maintaining a restrictive policy stance for some time." What the Fed did: It delivered two more 75-basis-point rate increases to follow the two it had done in the meetings before Powell's speech, and then increased the policy rate in smaller increments until it reached the 5.25%-5.50% range in July 2023.
2023: RATE HIKES STILL POSSIBLE
In remarks that were less stern than those delivered the previous year, Powell held out the possibility of more rate hikes while acknowledging the signs of progress in reining in inflation.
What Powell said: "We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data. Restoring price stability is essential to achieving both sides of our dual mandate. ... We will keep at it until the job is done."
What the Fed did: It held the policy rate in the 5.25%-5.50% range, set just weeks before Powell's speech, for a little over a year.
2024: RATE CUTS COMING SOON
Risks had now shifted from inflation to employment, and Powell sent a clear signal that rate cuts were coming.
What Powell said: "My confidence has grown that inflation is on a sustainable path back to 2%. ... We do not seek or welcome further cooling in labor market conditions. ... The time has come for policy to adjust."
What the Fed did: It ended the year-long hold on the policy rate by cutting it by half of a percentage point in September 2024, and by another half a percentage point over the final two meetings of 2024.
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