The annual Jackson Hole gathering closed with what may well prove to be Jerome Powell’s last major act before the September meeting — and while he resisted committing to a cut, the stage remains set for one, predicts Nigel Green, CEO of global financial advisor deVere Group.
The Federal Reserve Chair stressed caution, flagging that key jobs and inflation data are still to come before the mid-September decision. But despite the hesitancy, investors are right to expect that a rate cut is near.
“Powell did what central bankers do best at Jackson Hole — he kept the door open,” Green said. “The fact remains, we believe, that the Fed is already behind the curve, and the balance of risks is shifting toward easing sooner rather than later.”
The Fed has not reduced rates since December, but cracks in the economy are becoming more visible. Growth is softening, the labour market is showing signs of strain, and tariffs imposed by President Donald Trump are feeding price pressures across supply chains.
“The irony is that Trump’s tariff push, designed to project strength, is one of the biggest inflationary forces in the economy right now,” Green said. “Rate cuts may not solve the tariff problem, but they can keep credit flowing and prevent an avoidable downturn.”
The calendar matters. On the first Friday of September, the latest jobs report will test whether hiring momentum can reassert itself. The following week, consumer and producer price reports will show whether July’s unexpectedly hot wholesale prices were a blip or the start of a sticky trend. Markets are already on edge: the dollar has whipsawed, Treasury yields are sliding, and risk-sensitive currencies from the Australian dollar to the Korean won are reacting to every hint of Fed recalibration.
“Powell knows the cost of inaction is rising,” Green added. “If the jobs data are weak, or if inflation shows signs of rolling over, he’ll have all the cover he needs to move. Waiting longer risks tightening financial conditions even further. Markets are not patient forever.”
Historically, Jackson Hole has marked turning points in Fed communication. It was here in 2010 that Ben Bernanke hinted at quantitative easing, setting the stage for years of ultra-loose policy. In 2022, Powell first articulated “higher for longer.” This year, the message was more guarded, but the subtext is unmistakable: the Fed is preparing markets for change.
The potential beneficiaries of lower rates are already clear. Tech and AI companies, with heavy investment pipelines, would find capital cheaper. Real estate investment trusts and utilities, which thrive when bond yields fall, could see demand surge. Small-cap stocks, often reliant on borrowing, would gain easier access to credit.
“The winners from lower rates are not theoretical,” Green stated. “They’re the companies that will drive the next cycle of growth. Investors who position early will capture the upside before it becomes consensus.”
At the same time, the broader economy is caught in a divergence. High-income households continue to spend, but middle- and lower-income consumers are feeling the squeeze. Earnings season has laid bare this split.
This dynamic is precisely why a rate cut is becoming necessary — to ensure that the weakest parts of the economy do not drag the rest into contraction.
“The Fed cannot target tariffs, but it can target confidence,” Green said. “A cut in September would reassure households and businesses that the central bank is not asleep at the wheel. Delaying only raises the odds of a harder landing.”
For Powell, the decision is not whether to cut, but when. At Jackson Hole, he signalled he is watching the data, but history suggests the data will point toward easing. With global peers from the European Central Bank to the Bank of England already recalibrating policy stances, the Fed risks isolation if it holds back.
“The window for action is now,” said Green. “We expect a cut in September. It’s not yet rubber-stamped, but the logic is overwhelming. If Powell waits for perfect conditions, the Fed will end up chasing events instead of shaping them.”
Powell’s looming departure as Chair of the US Federal Reserve could hand President Trump significant influence over the world’s most powerful central bank – and with it the direction of global monetary policy, Green warned.
The warning comes as the Fed’s annual Jackson Hole symposium closes today in Wyoming, an event where policy shifts are often signalled and where investors are already looking beyond Powell’s remarks to the possibility of Trump shaping the institution’s future.
“Powell’s exit is not just about one individual stepping down,” Green observed. “It could transfer power to Trump, giving him the opportunity to appoint a Fed chair who reflects his priorities. This would have major consequences for interest rates, inflation, the dollar, and global markets.”
Powell’s term expires next May, but the process of transition has already begun.
Trump has nominated Stephen Miran to replace outgoing Governor Adriana Kugler, pending Senate confirmation, with a term running into early 2026. If Powell were to step down earlier from his longer-term position on the Fed’s board of governors, Trump could fill that seat directly.
“Markets move on expectations, not waiting for the official moment,” explained Green. “If investors believe Trump’s choice will soon shape policy, Powell’s influence will erode quickly. This is why the countdown to 2026 matters now.”
Jackson Hole underscores the stakes. Last year, academic work presented there highlighted a turning point in the labour market, paving the way for Powell to argue for looser policy, which culminated in a 50-basis-point cut. Trump derided the decision as too slow, a frustration that signals the type of Fed chair he would prefer to appoint.
“Trump could look for someone willing to cut more quickly, to align the central bank with his growth agenda and political programme,” Green suggested. “That kind of leadership would be far more aggressive than Powell’s cautious approach.”
History shows how leaders engineer such shifts. Japan’s Shinzo Abe appointed Haruhiko Kuroda to spearhead radical easing under Abenomics. In Britain, Mark Carney’s early confirmation as Bank of England Governor reset expectations months before his predecessor left.
“Global precedent suggests Trump could follow the same path,” said Green. “The president has both the incentive and the ability to move early, ensuring markets focus on his appointee well before Powell’s term officially ends.”
The implications are global. The Fed’s decisions set borrowing costs not only for US households and businesses but also for governments, corporations, and investors worldwide. Shifts in US rates ripple into currencies, commodities, and capital flows.
“A Trump-influenced Fed could mean lower rates, a softer dollar, rising equities, and a renewed surge of interest in crypto,” Green noted. “But it could also risk overheating the economy, fuelling inflation, and undermining the Fed’s independence. The opportunities and dangers are equally significant.”
Central bank independence has always been contested. Presidents Lyndon Johnson and Richard Nixon both pressured Fed chairs to serve their political aims. What is different today is the scale of markets and the speed of global reaction.
“Once markets sense who might take Powell’s place, they will price in the change immediately,” Green said. “This means volatility and rapid adjustment long before May 2026. Powell’s eventual exit could transfer power to Trump in ways that fundamentally reshape the Fed. Investors should recognize that this shift is already coming into view and prepare now for its impact.”
Green argued that the US central bank will move by 25 basis points next month despite Powell’s expected caution.
“Powell will try to steady the market narrative in Jackson Hole,” said Green. “He doesn’t want to give the impression that the Fed has already signed off on a cut. But when you strip away the rhetoric, the evidence is compelling. We believe that rates are coming down in September.”
The labour market has delivered a stunning reversal. July payrolls added only 73,000 jobs, missing forecasts of 100,000. More damaging were the revisions: more than 250,000 positions were erased from May and June totals, leaving those months essentially flat.
The unemployment rate has ticked up to 4.2%. Treasury yields fell across the curve as investors repriced the outlook, and futures markets now imply a two-thirds chance of easing next month.
“The revisions show that the jobs engine is far weaker than policymakers thought,” Green said. “The Fed has been making decisions based on numbers that no longer stand. This forces a rethink. The momentum is clearly shifting, and it justifies fresh action.”