Powell ‘Sees the Light’ in His Final Jackson Hole Talk

Stocks (and gold) shot up in response to Powell’s talk, and Treasury yields declined in the wake of his comments, so let’s hope he follows through on this view.

Federal Reserve Chairman Jerome Powell talks to reporters following the regular Federal Open Market Committee meetings at the Fed on July 30, 2025 in Washington, DC. Photo by Chip Somodevilla/Getty Images

Commentary

All three major market indexes approached or reached new all-time highs last Friday after three down days in the middle of last week. The Friday surge came after Fed Chair Jerome Powell delivered an extremely dovish speech at the Kansas City Fed Conference in Jackson Hole, where he signaled “a shifting balance of risks” that “may warrant adjusting our policy stance.” Additionally, Powell said that “downside risks to employment are rising.” This tells us the Fed’s employment mandate is now overshadowing its inflation fears. Adding to the Fed’s new focus on jobs, jobless claims rose to a two-month high of 335,000 last week.