Last week the most anticipated event of summer took place at Jackson Hole, an event where the majority of developed countries' central banks and other financial institutions meet. Though the anticipation was high from market participants as it happens the remakes made by central banks especially US FED chair Powell were neutral with an upside risk.
The Fed Swap markets did not react to the September meeting odds. But for the November meeting the odds of a 25 bps rate hike increased by almost 10% to 48%. This is important as one month before these odds were at 30%.
As Chair Powell mentioned they would be careful in the near term as the inflation seasonality kicks in. The US equity markets recovered 50 points from the day low to close near day high. The dollar index did have a neutral reaction to the remarks.
September month data release will be important as they would show the impact of August price hikes in gasoline and other energy products along with some food inflation. But as it gets repeated in almost every speech of Chai Powell. The focus is and will be on the Core PCE inflation.
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