In the highly anticipated Jackson Hole speech, Fed Chair Jerome Powell noted that the three weeks since July FOMC meeting “have been eventful”. There were new tariffs on Chinese imports, further evidence in global slowdown notably in Germany and China. Also, there were geopolitical events including “growing possibility of a hard Brexit, rising tensions in Hong Kong, and the dissolution of the Italian government.”
Though, US economy has “continued to perform well overall, driven by consumer spending”. Job creation slowed but is “still above overall labor force growth”. Inflation seems to be “moving up closer to 2%. Powell pledged, “based on our assessment of the implications of these developments, we will act as appropriate.
Dollar dips mildly after the release but overall, downside is limited for the moment.
