• Fed Chairman Jerome Powell is due to speak on monetary policy at the Jackson Hole Symposium.
• All eyes remain on Powell’s speech for fresh cues on the US interest-rate outlook.
• The US Dollar is set rock on Powell’s speech after Wednesday’s dovish Fed Minutes.

US Federal Reserve (Fed) Chairman Jerome Powell is scheduled to deliver a speech titled “Reassessing the Effectiveness and Transmission of Monetary Policy” on the second day of the annual Jackson Hole Economic Symposium on Friday at 14:00 GMT.  

Market participants will closely scrutinize Powell’s speech for any fresh hints on the trajectory of monetary policy, particularly about the magnitude of the Fed’s first interest-rate cut in years and the potential scope and timing of subsequent rate reductions. 

His words are expected to stir markets, injecting intense volatility around the US Dollar (USD), as the world’s most powerful central bank heads toward a policy pivot as early as September.  

In the July policy meeting, the Fed left the federal funds rate unchanged in the range of 5.25%-5.50% and shifted focus to the second component of its dual mandate – full employment.

Fed Chair Powell said during the post-policy meeting press conference that the labor market “has come into better balance”. “We are attentive to risks on both sides of the dual mandate,” Powell said, a shift from maintaining earlier that they are “highly attentive” to inflation risks. 

"The unemployment rate remains low. Data suggests the labor market has returned to where it was on the eve of the pandemic. A broad set of labor market indicators show it is strong but not overheated,” Powell added.

Since then, other Fed policymakers have voiced their concerns about the strength of the labor market.

The US employment data for July, however, came in weak and spurred recessionary fears. The headline Nonfarm payrolls increased by 114,000 jobs last month after rising by a downwardly revised 179,000 in June, according to the US Bureau of Labor Statistics (BLS). The Unemployment Rate climbed to 4.3% from 4.1% in June.