Investors are still on the fence whether or not Powell might reveal a tapering plan at the Jack Hole Symposium, which is being held virtually this year.
The combination of light news flow, few economic releases and caution ahead of the Jackson Hole event has taken all of the excitement out of the markets.
“I wouldn’t be surprised if this turns out to be one big anticlimax, with Powell saying very little of note and instead insisting that the data will dictate any decisions in the upcoming meetings.
“We expect the Chair’s speech to echo the latest July meeting minutes, suggesting that QE tapering is likely by year-end, but we don’t expect a September announcement.
“Few market participants appear willing to make any firm commitments before the speech Fed Chair Powell is due to give on Friday.
“In order to keep this proposed timeline, Chair Powell should make it clear that tapering discussions are ongoing even as new data suggest further progress in meeting its dual mandate,” said BBH Global Currency Strategy global head Win Thin.