US Federal Reserve chairman Jerome Powell's in the Hole - the annual Jackson Hole symposium, that is.
Out of or deeper into the (Jackson) hole?
Powell's all too aware that he has to mind his Ps and Qs because his every word would be sliced, diced, and dissected for indications of a fundamental - even tectonic, given the current state of the US and international economic backdrop - shift in the Fed's policy thoughts and forward actions that would, in turn, engineer a turning point in the global economy.
What happens after he spills his guts at the Hole will be Jerome's biggest test since he assumed the Fed chairmanship since February 2018 - nominated by no less than US President Donald Trump himself.
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Two things are certain.
One, Jerome would be careful not to disappoint financial markets that are expecting another 25 bps cut that will take the fed funds rate down to 1.75%-2.0% at the September FOMC meeting - 93.5% probability according to CME Group's "FedWatch Tool".
Two, Jerome will not acquiesce to Trump's "demand" to chop rates "by at least 100 basis points, with perhaps some quantitative easing as well". Doing so would just heighten financial market anxiety.
Jerome's task is not made any easier by the current internal division of views at the Fed, as the minutes of the 30-31 July FOMC reveal -- when it decided to cut the fed funds rate by 25 bps to 2.0%-2.25%.
"A couple of participants indicated that they would have preferred a 50 basis point cut in the federal funds rate at this meeting rather than a 25 basis point reduction. They favored a stronger action to better address the stubbornly low inflation rates of the past several years, recognizing that the apparent low sensitivity of inflation to levels of resource utilization meant that a notably stronger real economy might be required to speed the return of inflation to the Committee's inflation objective."
"Several participants favored maintaining the same target range at this meeting, judging that the real economy continued to be in a good place, bolstered by confident consumers, a strong job market, and a low rate of unemployment. These participants acknowledged that there were lingering risks and uncertainties about the global economy in general, and about international trade in particular, but they viewed those risks as having diminished over the intermeeting period. In addition, they viewed the news on inflation over the intermeeting period as consistent with their forecasts that inflation would move up to the Committee's 2 percent objective at an acceptable pace without an adjustment in policy at this meeting."
"Finally, a few participants expressed concerns that further monetary accommodation presented a risk to financial stability in certain sectors of the economy or that a reduction in the target range for the federal funds rate at this meeting could be misinterpreted as a negative signal about the state of the economy."
These are all valid rationales.
However, factor in the general global uncertainty that is Trump and his tariff war - conspicuous in the FOMC "participants'" reasons by its absence and Trump's demand for a 100 basis rate cut (plus QE) are likely to be filled ... so are expectations of US recession.
Powell could use his Jackson Hole speech to put the onus back on Trump and echo the Wall Street Journal's words:
"Cut the Trump Uncertainty Tax...His best stimulus policy would be to end his tariff campaign."