The Claman Countdown panelists David Kudla and David Seif discuss the state of the economy under President Donald Trump.
Federal Reserve Chair Jerome Powell will deliver a keynote address at the annual Jackson Hole event on Friday at a crucial time as the economy anticipates the central bank’s next interest rate cut and as his tenure at the helm of the Fed winds down.
Powell’s speech in the spotlight at Jackson Hole is expected to be his last as Fed chair, as his term expires in May 2026 and President Donald Trump is vowing not to reappoint him to the role. Trump appointed Powell to the role in 2017. His term as a Fed governor extends into 2028, though Powell hasn’t said whether he’ll continue to serve after his chairmanship.
The chair’s keynote address also comes at a time of uncertainty for the U.S. economy. While the labor market has remained near full employment, the July jobs report was weaker than expected and downward revisions to employment in May and June showed job creation nearing a stall speed. Inflation has come down markedly from the 41-year highs seen in 2022, but has trended higher in recent months as more tariffs take effect and cause a rise in consumer prices.
Powell may use the opportunity presented by his annual speech at the Kansas City Fed’s monetary policy conference to signal to the market how he views the latest data and whether rate cuts will resume in September, after he employed a similar tactic last year.
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Fed Chair Jerome Powell will deliver a highly-anticipated speech at the Jackson Hole conference on Friday. (Al Drago/Bloomberg via Getty Images / Getty Images)
In his August 2024 speech, Powell said the Federal Reserve would begin cutting interest rates at its next meeting in September. He explained that, “The time has come for policy to adjust,” adding that the “direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
The Fed ultimately cut interest rates by 50-basis-points in September 2024, then tacked on 25-basis-point cuts in November and December.
However, policymakers have left the benchmark federal funds rate unchanged at a range of 4.25% to 4.5% at all five of their meetings in 2025 amid uncertainty over the impact of tariffs on inflation and the durability of the labor market.
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Fed Chair Jerome Powell speaks with Bank of Canada Governor Tiff Macklem and Bank of England Governor Andrew Bailey in 2024. (Photographer: Natalie Behring/Bloomberg via Getty Images / Getty Images)
The Fed’s most recent monetary policy meeting was marked by a dual dissent from Fed Governors Michelle Bowman and Christopher Waller, who voted in favor of a 25-basis-point cut and argued that any tariff-induced inflation will be a one-time shift in price levels, while supporting the labor market preemptively.
It was the first dual dissent in favor of rate cuts since 1993, though the Federal Open Market Committee’s (FOMC) vote was 9-2 in favor of leaving rates unchanged.
With change at the top looming next year, Federal Reserve policymakers are focused on economic conditions in the present.
Recent data has shown a modest uptick in inflation as tariffs begin to impact consumer prices, with the Fed’s preferred gauge – the personal consumption expenditures (PCE) index – has risen from a 2025 low of 2.1% in April to 2.3% in May and 2.6% in June. Those figures are well above the Fed’s target of 2%.
In the labor market, the July jobs report showed just 73,000 jobs added for the month – well below the 110,000 estimate of LSEG economists, while employment in May and June was revised downward by 258,000. That left the three-month average of job gains at a little more than 35,000 jobs, signaling a sluggish labor market, while the unemployment rate ticked slightly higher to 4.3%.
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Federal Reserve Governors Michelle Bowman and Christopher Waller voted in favor of interest rate cuts at the central bank’s last monetary policy meeting. (REUTERS/Ann Saphir/File Photo / Reuters)
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The July PCE inflation report is due to be released on Aug. 29, a week after Powell’s speech, while the August consumer price index (CPI) is slated for release on Sept. 11. The August jobs report is also scheduled to be released on Sept. 5.
