All eyes on US Fed Chair Jerome Powell's final Jackson Hole address

Editor's note: Ankit Prasad is a CGTN business commentator. The article reflects the author's views and not necessarily those of CGTN.

US Federal Reserve Chair Jerome Powell is preparing for what is likely to be his final address at the annual Jackson Hole economic policy symposium this weekend. The anticipation is high, with speculation straddling the fields of monetary policy, politics, institutional independence, global economics, and even venturing into the ambit of good-natured topical guesswork.

Depending on your standpoint, the questions may be: Will Powell give an insight at future monetary policy direction? Will he make a stand against US President Trump's pressure tactics and uphold the Fed's dual mandate towards under-control prices and maximum employment? Will he weigh the merits of the Fed's flexible inflation targeting framework?

As always when central bank governors speak, there is more to be read from what is left unsaid or written between the lines. And with an audience of central bank governors and policy makers from across the globe, this, for once, is Powell's crowd. But how will he use his last address as Fed chair at the most important annual forum, and how will it impact his own legacy?

Indeed, the organizers of the exclusive lake resort jamboree - the Federal Reserve Bank of Kansas City - may be tempting fate. The theme of Jackson Hole 2025 is "Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy." And the emerging data from the American labor market is concerning and may require addressing.

US nonfarm jobs increased by 73,000 in July, after just 14,000 in June. This after May and June numbers were revised downward by a stunning 258,000 jobs combined. The revision incensed President Trump who fired the commissioner of the US Bureau of Labor Statistics which released the report. The data will be food for thought for the FOMC when it next meets at mid-September. Could Powell give an early indication at Jackson Hole if labor worries may tip his hand toward a rate cut?

From the FOMC minutes for the July meeting, it is clear that there was a different picture about employment. It notes "Members agreed that the unemployment rate had remained at a low level and that labor market conditions had remained solid. Members concurred that inflation remained somewhat elevated." Already in July, while the target range for the federal funds rate was maintained at 4.25 to 4.5 percent for the fifth straight meeting, two voting members had dissented, calling for a 25 bps cut citing downside risks to employment due to a slowdown in economic activity.

All members were unanimous in supporting maximum employment and abidance by the Fed's Federal Open Market Committee's (FOMC) two percent inflation objective, but the dissenters also judged that inflation was already within the desired range if you exclude tariff effects. However, the tariff effects aren't so easily excluded. "Participants judged that considerable uncertainty remained about the timing, magnitude, and persistence of the effects of this year's increase in tariffs," the FOMC minutes state. And that's where Trump comes in.

The US president, under constant fire for his tariff policy, has come to paint Powell as the biggest bottleneck to the US's economic growth. Jerome "Too Late" Powell is what Donald Trump has christened the Fed chair, criticizing him repeatedly for not lowering interest rates. Trump has regularly taken questions from reporters on whether he will fire Powell. Whether the president has the power to sack the Fed chair is a separate topic altogether, but the prospect of this has spooked the market.

The US dollar index dropped 0.8 percent on July 16 amid reports Trump was considering firing Powell, following Deutsche Bank strategist George Saravelos's warning that Powell losing his job is "one of the largest under-priced event risks over the coming months" with the potential to collapse the dollar and the bond market. That caused Trump to relent, but hasn't stopped him continuing to target the Fed. During a recent visit to its under-renovation headquarters, he held an awkward on-camera exchange with Powell about cost overruns, confronting him with a report he dramatically pulled out of his pocket.

Lists of Powell's potential successors have also been floated, while Trump's advisors and MAGA analysts have proposed solutions such as announcing the next Fed chair well in advance so that his/her policy views can be factored in by the market well in advance of the end of Powell's term in May 2026. In the latest, Trump has also targeted another Fed governor, Lisa Cook, whom he's demanded must resign over a thus-far unsubstantiated claim that she committed mortgage fraud. Cook says she won't be bullied. Soon, however, she and Powell are likely to have a fresh Trump appointee among them - Stephen Miran, currently chair of the Council of Economic Advisors, is to fill a position that will remain vacant till at least January 31, 2026. It is thought this will give Trump a voice on the Fed.

For the moment, however, it's all about Powell's voice. While several among his predecessors have fallen afoul of Presidents - George Bush Sr memorably blamed then Fed chair Alan Greenspan for his loss in the 1992 election - no Fed chair has been constantly berated like he has. At the Jackson Hole central bankers' meeting, Powell will get an opportunity to have his say. And interested parties from around the world will be hanging on to every word.