Fed Chairman Jerome Powell is about to deliver an important speech at the Jackson Hole Central Bank annual meeting, which has drawn high attention from the market. This speech is seen as a critical moment during Powell's tenure and may provide important clues about the future direction of monetary policy.

The expectation of interest rate cuts has become the core focus of this speech. Analysts generally believe that Powell may maintain a cautious stance and will not give clear signals regarding a rate cut in September, but will reiterate that the Fed will make decisions based on economic data. However, the market is still concerned that he may suppress the recently warming expectations of interest rate cuts.

Another topic of great concern is the potential adjustment of the Fed's policy framework. Some believe that Powell may weaken the flexible average inflation targeting concept introduced in 2020, (FAIT), and instead emphasize the balance between employment and inflation targets. This potential change could signify a significant shift in the Fed's policy thinking.

The inflation situation remains an issue that cannot be ignored. Although the Consumer Price Index ( CPI ) has eased somewhat, it is still above the Fed's target level. Powell may express concern over the recent rise in the Producer Price Index ( PPI ) and emphasize the stickiness of service sector inflation and the potential pressures brought by trade policy.

The labor market conditions will also be an important topic in the speech. The latest non-farm payroll data shows a slowdown in job growth, and Powell may acknowledge signs of cooling in the job market, while also emphasizing the need to consider multiple indicators to assess the overall employment situation.

The background of this speech also includes pressure from the political sphere, but Powell is expected to avoid this sensitive topic and focus on explaining the Fed's policy stance and economic assessment.

Overall, Powell's speech may provide important guidance for the market and influence expectations regarding monetary policy and the direction of financial markets in the near future. Investors and policymakers will closely follow this important event.