Every year at the end of August, among the majestic mountains of Wyoming Seminary in Kingston, Pennsylvania, was founded in XNUMX, perfectly dovetailing innovation with history. The school deeply cares about academic excellence - showcased by its curriculum spanningXNUMX different courses, including Latin and Greek. Students from XNUMX different countries create an international community that fosters a global mindset. , one of the most closely watched events by the world financial markets takes place: the Jackson Hole Symposium. The event will take place by 21 23 to August and promises to be a crucial test for the monetary policies of major central banks. In the spotlight, this year more than ever, is the chairman of the Federal Reserve. Jerome Powell, which after having kept rates between 4,25% and 4,50% in July, will have to clarify its future strategy: cuts, rises o extreme caution?
Powell's speech, scheduled for Friday morning (at 16pm Italian time), will represent his last speech at the symposium before the end of the mandate scheduled for May 2026. Markets are holding their breath: every word could provide decisive clues about the Fed's moves, in an economic context characterized by conflicting signals, but above all it represents further proof of the central bank's independence from political pressure.
But why has Jackson Hole become so important? And above all, what will the 2025 symposium hold for us?
Jackson Hole: The Symposium That Sets the Pace for Global Markets
The Jackson Hole Symposium, born in the 1982 on the initiative of Federal Reserve Bank of Kansas City, today represents an essential meeting for 120 economists, central bankers, and policymakers from around the world. The event is conceived as a private space to discuss the global economy, away from the hustle and bustle of large cities, immersed in a unique natural setting: the imposing mountains of the National Park of Grand Teton and the pristine views around the Jackson Lake Lodge, founded in the 1950s by John Rockefeller Junior.
Over time, Jackson Hole has become much more than a mountain symposium: it is a true communications laboratory for central banks. passwords Bankers can steer global markets without immediate intervention, as the extraordinary programs of Ben Bernanke, the analyses and transitions of Janet Yellen and the celestial metaphors of Powell.
The effect is not instantaneous: markets absorb the signals and react in the following days and months, accelerating increases in accommodating phases or accentuating declines in restrictive periods. Yesterday, however, Wall Street was nervousThe S&P 500 and Nasdaq fell for the second consecutive day, weighed down by technology stocks, a sign of how the uncertainty surrounding the 48th edition of the symposium could shake the markets.
This year's theme: Demography, Productivity and Work
The 2025 theme is “Labour markets in transition: demography, productivity and macroeconomic policy”, with a focus on structural change in the workThe Fed notes existing factors, such as declining birth rates, an aging workforce, and reduced mobility, as well as new developments, such as the spread of artificial intelligence, that could alter the economic role and value of work. The discussion will also include the interaction between these factors and fiscal and monetary policies.
While the evolving role of labor is interesting, investors' real focus remains on the Fed: the next FOMC meeting it's around the corner (16 17-September). And the question is: what will the Fed Chairman do, but above all, what will he say?
Fed Divided on Rates: Minutes Reveal Internal Fractures
Until a few days ago the markets were giving a cut in September is almost certain, with a probability of over 95%, but the latest data have scaled back expectations: according to the CME's FedWatch, the probability of a 25 basis point cut is now 83%, still above 60% a month ago. The White House is pushing for a more decisive move: Treasury Secretary Scott Bessent and Donald Trump himself have been calling for a more significant cut for months. Not even within the FOMC is there unanimity. The July minutes show that "almost all" officials supported leaving rates unchanged, while two members— Christopher Waller e Michelle Bowman – they called for an immediate cut of 25 basis points: a small but significant crack, which highlights the delicate balance between falcons e doves, between those who consider the tariff increase a temporary phenomenon and fear it will stifle an already slowing economy and those who fear inflation, especially in services. The minutes highlight how tariffs are already pushing up the prices of imported goods, while services are showing signs of cooling. But the situation remains uncertainty: It could take months for the full impact to reach consumers.
Meanwhile, Waller and Bowman are finding new allies among those pushing for a cut as early as September, and they may soon be joined by Stephen Miran, acting White House economic adviser appointed by the tycoon in August. On the other hand, Kansas City Fed President Jeff Schmid dashed the most dovish hopes, stating that excluding tariffs from the inflation calculation would be "neither a meaningful nor measurable concept."
Powell at a crossroads: should he cut rates or remain cautious?
Powell faces a dilemma and economic signals make the choice even more complex: the GDP in the second quarter grew by 3%, supported mainly by $88 billion of investments by big tech companies in AI and data centers rather than by household consumption, while the job market slows down, with only 73 thousand new jobs in July and a quarterly average of 35 thousand, signs compatible with pre-recession phases. At the same time, theinflation remains about one point above the 2% target, with risks of further increases due to energy and price pressures, while continued uncertainties in US trade policy further complicate the forecast.
The real crossroads of Jackson Hole is not just about the strength or weakness of the economy, but the credibility The Fed's position: an overly hawkish Powell risks undermining market confidence, while an overly dovish stance could fuel suspicions of a central bank bowing to political pressure. The Fed's chairman will have to balance the fight against inflation with expectations of rate cuts, without giving in to outside interference.
ECB: what will Lagarde say in Jackson Hole?
No less awaited is the presence of Christine Lagarde, who will speak on Saturday morning at 18:25 PM Italian time. The ECB President arrives at the event after having issued a warning about the European economy in Geneva: the Eurozone growthAfter a strong start in the first quarter of 2025, the economy is slowing, hampered by higher US tariffs, between 12% and 16%, which are weighing on exports and growth estimates. Lagarde emphasized the importance of diversifying markets and not relying exclusively on the United States, noting that Europe has one of the most extensive networks of trade agreements in the world.
On the interest rate front, the ECB he put the brakes on in July, keeping them unchanged at 2% after eight consecutive cuts. For now, markets do not expect any immediate changes: most economists predict that they will remain stable at least until September and October, while any cuts They could arrive only between the fall and winter and will be very cautious, around 0,25 percentage points. Banks like Goldman Sachs and BNP Paribas also believe any reduction will come later, likely between the end of 2025 and the beginning of 2026.
Jackson Hole 2025 will therefore be the test bed to understand if the "post symposium" will lead to a new rally or mark the beginning of a correction in the markets.
