Wall Street analysts react to Powell’s conciliatory speech to Jackson Hole, by Investing.com

Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium drew mixed reactions from Wall Street analysts, all of whom noted a dovish tone and a potential shift in the Fed’s approach to monetary policy.

Evercore ISI described Powell’s remarks as “bullish-dovish,” emphasizing his statement that “the time has come for policy to adjust.”

Powell emphasized the Fed’s commitment to doing “everything we can to support a strong labor market” while continuing to bring inflation back to its 2 percent target.

Evercore said Powell’s talk pointed to a range of 25 basis point (bp) cuts, but also left open the possibility of faster moves if needed. They interpreted his comments as a sign that the Fed is still aiming for a “soft landing” and is prepared to act aggressively if the labor market weakens further.

Overall, Evercore believes Powell’s stance reduces macroeconomic risks and sees it as a positive signal for markets.

UBS echoed that sentiment, saying Powell gave “the clearest indication yet” that the Fed is ready to begin easing policy restraint.

They noted its emphasis on shifting risks, now focusing more on downside risks to employment than inflation.

UBS expects 25bp cuts at each of the three remaining Federal Open Market Committee (FOMC) meetings this year, consistent with Powell’s indication that the Fed believes it can achieve both 2% inflation and a strong labor market with an “adequate” pace of relaxation.

Goldman Sachs He also described the speech as dovish, predicting a 25bp rate cut at the September Fed meeting.

Goldman noted that Powell expressed increased confidence in the outlook for inflation, while placing more emphasis on risks to the labor market.

While they expect a 25bp cut in September, they suggested a 50bp cut could be on the table if the upcoming employment report shows significant weakness.