TLDR
- Federal Reserve Chair Jerome Powell will deliver key remarks Friday at Jackson Hole, with markets expecting 85% probability of rate cuts in September
- Major retailers Walmart, Target, and Home Depot report earnings this week, showing impact of tariffs on consumer spending
- Fed meeting minutes from July will be released Wednesday, revealing details on split vote regarding rate cuts
- Housing market data and jobless claims will provide insights into economic conditions
- Powell’s speech may be his last as Fed chair, with focus on future monetary policy direction
Federal Reserve Chair Jerome Powell takes center stage this week at the annual Jackson Hole Economic Policy Symposium in Wyoming. His Friday speech comes as markets place an 85% probability on rate cuts next month.
Powell faces mounting pressure from the Trump administration to lower borrowing costs. The Fed has kept rates unchanged since December, creating a challenging position for the central bank.
The Kansas City Fed’s annual meeting at Jackson Lake Lodge has historically served as a platform for major policy announcements. This year’s event carries extra weight as it may be Powell’s final Jackson Hole address as Fed chair.
Rate Cut Expectations Build
Markets are betting heavily on a September rate cut of at least 0.25%. Recent economic data shows inflation ticking higher while job market conditions appear weaker than previously thought.
JUST IN: 🇺🇸 Goldman Sachs expects the Fed to cut interest rates three times this year. pic.twitter.com/ALBt2XY20B
— Whale Insider (@WhaleInsider) August 18, 2025
BMO Senior Economist Jennifer Lee noted the intense pressure on Powell ahead of the gathering. The Fed chair must balance economic data with political demands for lower rates.
Wednesday’s release of Fed meeting minutes from July will provide additional insight. Two committee members voted for rate cuts last month, breaking from their colleagues in a split decision.
The minutes could reveal the reasoning behind this dissent. Fed governors Waller and Bowman opposed keeping rates in the current 4.25%-4.50% range.
Housing market data and weekly jobless claims round out the economic calendar. These reports will help gauge overall economic health ahead of Powell’s remarks.
Retail Earnings Show Tariff Impact
Major retailers report earnings this week, with Walmart leading the charge on Thursday. The retail giant previously indicated it would raise prices to offset tariff costs.
Target reports Wednesday following warnings that sales may decline from earlier projections. The company’s stock has fallen over 20% this year, raising questions about leadership.
Home Depot delivers results Tuesday after stating it would try to maintain current pricing. The hardware retailer faces challenges from a sluggish housing market.
TJX Companies, parent of T.J. Maxx, said tariffs would impact revenue in its previous quarter. Lowe’s and Ross Stores also report this week.
Retail sales rose 0.5% in July after a 0.9% June increase. Consumer spending appears to have stabilized following tariff-related disruptions this spring.
Walmart expects 4% same-store sales growth for the quarter, down from 4.5% in the previous period. The company noted consumers remain “choiceful” across all income levels.
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