{"id":2577,"date":"2025-08-31T07:52:25","date_gmt":"2025-08-31T07:52:25","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/08\/31\/usd-slips-after-powell-pivoted-closer-to-rate-cuts-in-jackson-hole\/"},"modified":"2025-08-31T07:52:25","modified_gmt":"2025-08-31T07:52:25","slug":"usd-slips-after-powell-pivoted-closer-to-rate-cuts-in-jackson-hole","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/08\/31\/usd-slips-after-powell-pivoted-closer-to-rate-cuts-in-jackson-hole\/","title":{"rendered":"USD Slips After Powell Pivoted Closer to Rate Cuts in Jackson Hole"},"content":{"rendered":"<div dir=\"ltr\">\n<p>Federal Reserve Chair Jerome Powell delivered a dovish surprise at the Jackson Hole Economic Symposium on Friday, signaling that interest rate cuts may be warranted as economic risks shift, boosting expectations for September policy easing.<\/p>\n<p>In his closely watched annual address, Powell stated that \u201cwith policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,\u201d marking a significant pivot away from his usual cautious approach.<\/p>\n<h3>Key Takeaways from Powell\u2019s Jackson Hole Speech<\/h3>\n<ul>\n<li> <strong>Policy pivot signals<\/strong>: Powell indicated the Fed may need to adjust its restrictive policy stance, with the \u201cshifting balance of risks\u201d now tilting toward employment concerns rather than inflation fears<\/li>\n<li> <strong>Labor market concerns<\/strong>: Job growth has slowed dramatically to just 35,000 per month over the past three months, down from 168,000 monthly in 2024, raising downside risks to employment<\/li>\n<li> <strong>Tariff inflation assessment<\/strong>: While acknowledging tariffs are pushing up goods prices, Powell suggested the effects will likely be \u201crelatively short-lived\u201d \u2013 a one-time price level shift rather than persistent inflation<\/li>\n<li> <strong>Framework overhaul<\/strong>: The Fed released a revised monetary policy framework, removing language about the effective lower bound as a defining feature and eliminating the \u201cmakeup strategy\u201d for inflation targeting<\/li>\n<li> <strong>Independence emphasized<\/strong>: Powell stressed that FOMC decisions will be \u201cbased solely on their assessment of the data,\u201d maintaining Fed independence amid political pressures<\/li>\n<\/ul>\n<p><strong>Link to Fed Chairperson Powell\u2019s Speech in Jackson Hole Symposium<\/strong><\/p>\n<p>The Fed chair\u2019s assessment that tariff-induced inflation pressures will prove temporary appears to have given policymakers confidence to prioritize employment concerns over price stability risks. This marks a significant evolution from earlier this year when officials remained focused primarily on bringing inflation back to the 2% target.<\/p>\n<h2>Market Reaction<\/h2>\n<p><strong>U.S. Dollar vs. Major Currencies: 15-min<\/strong><\/p>\n<p>The immediate market response was swift and decisive, with the dollar suffering broad-based losses as traders repositioned for an increasingly dovish Fed trajectory.<\/p>\n<p>The greenback plunged nearly 1% against major trading partners within minutes of Powell\u2019s key remarks. The sharp selloff accelerated following his specific mention of \u201cadjusting our policy stance,\u201d with currency markets interpreting this as a clear signal that September rate cuts are now highly probable.<\/p>\n<p>USD chalked up its steepest initial decline versus JPY (-0.75%) before pulling higher ahead of this week\u2019s open, accompanied by notable losses versus AUD (-0.98%) and NZD (-0.83%).<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Federal Reserve Chair Jerome Powell delivered a dovish surprise at the Jackson Hole Economic Symposium on Friday, signaling that interest rate cuts may be warranted as economic risks shift, boosting expectations for September policy easing. In his closely watched annual address, Powell stated that \u201cwith policy in restrictive territory, the baseline outlook and the shifting<\/p>\n","protected":false},"author":2,"featured_media":2578,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-2577","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news"],"featured_image_urls":{"full":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405.png",780,405,false],"thumbnail":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405-150x150.png",150,150,true],"medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405-300x156.png",300,156,true],"medium_large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405-768x399.png",640,333,true],"large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405.png",640,332,false],"1536x1536":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405.png",780,405,false],"2048x2048":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405.png",780,405,false],"morenews-featured":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405.png",780,405,false],"morenews-large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405.png",780,405,false],"morenews-medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405-590x405.png",590,405,true],"crawlomatic_preview_image":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/08\/2577-usd-jackson-hole-news-2025-08-25-780x405-260x135.png",260,135,true]},"author_info":{"display_name":"henry","author_link":"http:\/\/ft365.org\/index.php\/author\/henry\/"},"category_info":"<a href=\"http:\/\/ft365.org\/index.php\/category\/latest-news\/\" rel=\"category tag\">Latest News<\/a>","tag_info":"Latest News","comment_count":"0","_links":{"self":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/2577","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/comments?post=2577"}],"version-history":[{"count":0,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/2577\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media\/2578"}],"wp:attachment":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media?parent=2577"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/categories?post=2577"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/tags?post=2577"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}