Bank of America on Powell speaking at Jackson Hole – to keep aggressive easing option open

Federal Reserve Chair Powell will speak during his regular time slot at Jackson Hole, Friday morning of the event at 10am:

Bank of America say that Powell’s speech is unlikely to have much impact on the US dollar. Analysts at the bank note that funds are still positioned for a stronger dollar, which may pose downside risk. But, even if Powell speaks dovishly its going to be difficult for him to sound more dovish than market expectations are pricing:

  • BoA cite markets pricing four cuts this year
  • “We do not think Powell will push against market pricing, keeping the option for aggressive easing depending on the data before the September meeting.”

BoA are right on the swing to dovish seen by markets. The ’50bp cut in September’ bandwagon is rolling:

Not everyone agrees, of course

This article was written by Eamonn Sheridan at www.forexlive.com. Source