Wall Street Analysts Respond to Powell’s Dovish Jackson Hole Speech

Federal Reserve Chair Jerome Powell’s recent speech at the Jackson Hole symposium elicited diverse reactions from Wall Street analysts, who noted a dovish tone and a potential shift in the Fed’s stance on monetary policy.

Evercore ISI characterized Powell’s remarks as “bullish-dovish,” underscoring his statement that “the time has come for policy to adjust.” He affirmed the Fed’s dedication to “doing everything we can to support a strong labor market” while striving to return inflation to its 2% target. Evercore interpreted Powell’s comments as signaling a series of 25 basis point (bp) rate cuts, while also keeping open the option for quicker adjustments if needed. They noted that the Fed appears focused on achieving a “soft landing” and is ready to take assertive action should the labor market show further signs of weakening. Overall, Evercore views Powell’s position as a reduction of macroeconomic risks, which they see as a positive indication for the markets.

Similarly, UBS reflected this optimism, stating that Powell provided “the clearest indication yet” that the Fed is prepared to begin easing policy restrictions. They pointed out his shift in focus toward the downside risks to employment rather than the threat of inflation.

UBS anticipates 25 bp rate cuts at each of the three remaining Federal Open Market Committee (FOMC) meetings scheduled for this year, aligning with Powell’s suggestion that the Fed believes it can achieve both 2% inflation and a robust labor market at an “appropriate” pace of easing.

Goldman Sachs also interpreted the speech as dovish, forecasting a 25 bp rate cut at the Fed’s September meeting. They noted that Powell demonstrated increased confidence in the inflation outlook while highlighting the risks to the labor market. Although they expect a 25 bp cut in September, they mentioned that a larger cut of 50 bp could be considered if the forthcoming employment report indicates significant weakness.