
Asia shares edge higher as markets await key Jackson Hole speech by US Fed’s Powell
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Asia shares edge higher as markets await key Jackson Hole speech by US Fed’s Powell – business live
Jerome Powell will give a speech at the Jackson Hole symposium in Wyoming. Investors hope he will provide hints of the Fed’s plans for the months ahead. At five consecutive meetings, the Fed has left rates unchanged. Markets are no longer pricing in another rate cut this year, with expectations having been pushed back to spring 2026. But some are also worried that his comments could end shattering expectations for a September rate cut. UK two-year gilt yields have jumped to their highest level since 9 June, rising three basis points to around 3.999%, as markets priced in later rate cuts by the Bank of England. The FTSE 100 dropped 0.2% at the start of trading, following its third consecutive record high on Thursday afternoon. It appeared to reflect a mix of profit taking, as well as investors taking a bit of a breather ahead of Powell’s speech.
49m ago 09.28 BST UK two-year gilt yields hit highest level in more than two months Yields on two-year gilts have jumped to their highest level since 9 June, rising three basis points to around 3.999%, as markets priced in later rate cuts by the Bank of England. Investors have been digesting data released earlier this week, showing that inflation in Britain rose to 3.8% in the 12 months to July. That was up from June’s 3.6% reading, sitting above the central bank’s 2% target for the 10th consecutive month. Markets are no longer pricing in another rate cut this year, with expectations having been pushed back to spring 2026, with many investors pointing to a cut in April next year. Share
1h ago 08.52 BST Powell’s speech could end up being “legacy defining” and, potentially, his last, according to some analysts, who expect the central bank may not be able to hold onto its leader much longer amid pressure from the Trump administration. But some are also worried that his comments could end shattering expectations for a September rate cut. Kevin Ford, FX & Macro Strategist at foreign exchange platform Convera says the conviction for a September cut is based on some shaky foundations, with the market odds of a September Fed cut having fallen from 95% to around 70% in two weeks Ford says: The problem is, the market’s conviction is built on some shaky foundations, and Powell’s speech could be the thunderbolt that shatters the calm. The current atmosphere feels eerily similar to last year, with markets fixated on a September cut. But the underlying data is starkly different. In 2024, the Fed was facing a different beast: a rising unemployment rate and the specter of recession. This year, after cutting 100 basis points, core inflation is still stubborn and the labor market, while showing some signs of cooling, isn’t screaming for emergency intervention. The economic context is simply not the same, yet the market is pricing in a cut with near-certainty.
This disconnect is what makes Powell’s speech a high-stakes event. Share Updated at 09.01 BST
2h ago 08.21 BST FTSE 100 dips on Friday open after third consecutive record close The FTSE 100 dropped 0.2% at the start of trading, following its third consecutive record high on Thursday afternoon. It appeared to reflect a mix of profit taking, as well as investors taking a bit of a breather ahead of Powell’s speech. There was a mix of stocks at the bottom of the index, with property sales platform Rightmove, software firm Sage Group and wealth manager St James’s Place all down 1% at the market open. Share