During his Jackson Hole speech Friday, Federal Reserve (Fed) Chair Jerome Powell stuck to the message that inflation was job number-one for monetary policymakers — a point reinforced by every other Fed official interviewed last week. Powell clearly wanted investors to know that more pain would be necessary to rein in inflation after coming across as more “dovish” during his July Fed meeting press conference.
Financial markets sold off sharply after last week’s speech, with the Dow closing down 1,000 points Friday, while interest rates at the front end of the yield curve moved overnight to the highest levels since the financial crisis of 2007-09. More volatility is likely as we enter a period of the year that is historically the most challenging for equity market returns.
The economic calendar this week is highlighted by Friday’s jobs report. Fed policymakers will be hoping for some signs of slowing after the red-hot July jobs number of 528,000.
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