Core Viewpoint - The upcoming Jackson Hole Economic Policy Symposium is expected to provide significant insights into the Federal Reserve's monetary policy direction, particularly through Chairman Powell's keynote speech on August 22, which will focus on the economic outlook and the review of the Fed's monetary policy framework [1][3]. Key Schedule Highlights - The complete agenda for the Jackson Hole Symposium will be released on August 21, with three main events: Powell's keynote speech on August 22, a lunch speech on the same day, and a closing panel discussion on August 23 featuring ECB President Lagarde and BoE Governor Bailey [2][3]. Focus of Powell's Keynote Speech - Powell's speech will likely address current policy issues rather than strictly adhering to the conference theme, which is "Transforming Labor Markets: Demographics, Productivity, and Macroeconomic Policy" [3]. The speech may also indicate potential adjustments to the FOMC's consensus statement, possibly reversing some changes made in 2020 and returning to a flexible inflation targeting strategy [3]. Media Interviews as Information Sources - Due to limited live coverage of the event, media interviews will serve as a crucial source of policy information, with approximately five Fed officials expected to participate in interviews on August 22 [4]. Historical data suggests that these interviews can provide more immediate insights into policy direction compared to academic discussions [4].

Core Viewpoint - The Federal Reserve has decided to maintain the benchmark interest rate at 4.25%-4.50%, aligning with market expectations, while expressing a cautious stance amid ongoing economic uncertainties [1][2][4]. Economic Conditions - Current economic uncertainty has decreased but remains high, with the Fed's language showing no significant changes from May [1][2]. - The market is increasingly concerned about the potential economic issues arising from prolonged high interest rates, especially in the context of complex global trade dynamics and tariff policies [2][3]. Monetary Policy Outlook - Fed Chair Powell emphasized a flexible approach to future monetary policy, closely monitoring tariff policies and inflation data as key determinants [2][3]. - Recent economic data suggests a potential for rate cuts, with May's CPI showing a year-over-year increase of 2.4% and core CPI at 2.8%, indicating moderate inflation pressures [2][4]. Labor Market Insights - The unemployment rate remains at 4.2%, but recent non-farm payroll data showed job additions below expectations, indicating signs of labor market weakness [2][3]. - The ADP report indicated the lowest job additions in two years for May, further highlighting labor market concerns [2]. Communication Strategy - The Fed's communication strategy reflects a tendency to maintain a hawkish tone while allowing for policy flexibility, particularly in uncertain macroeconomic conditions [3][4]. - Research indicates that central banks tend to adopt conditional and scenario-based communication during high uncertainty, which helps maintain market confidence and policy flexibility [3]. Future Rate Cut Expectations - The Fed may shift its focus from inflation control to growth support, especially if inflation expectations can be effectively managed [4][5]. - A potential transition to a more flexible inflation targeting framework could indicate an increased tolerance for inflation above 2%, suggesting greater policy flexibility [5]. - Projections indicate that the Fed may accelerate rate cuts in late 2025 or early 2026, with an expected reduction of 75-100 basis points throughout 2025 [1][5].

Group 1: Nvidia's Performance - Nvidia reported a significant revenue increase for the latest fiscal quarter, with revenue reaching $44.04 billion, a 69% year-over-year growth, slightly above market expectations of $43.31 billion [13] - The net profit for Nvidia also saw a year-over-year increase of 26%, amounting to $18.8 billion [13] - Adjusted earnings per share (EPS) were reported at $0.96, surpassing the market expectation of $0.93 [13] - The growth in revenue was primarily driven by strong demand in AI solutions and accelerated computing within its computing and networking platforms [15] - However, gross margin faced pressure due to a $4.5 billion impairment related to H20 product inventory and procurement obligations, leading to a decline in both year-over-year and quarter-over-quarter margins [15] Group 2: US Stock Market Overview - The three major US stock indices closed lower, with the Dow Jones down 0.58% to 42,098.7 points, the S&P 500 down 0.56% to 5,888.55 points, and the Nasdaq down 0.51% to 19,100.94 points [3][5] - Major technology stocks mostly declined, with the "Big Seven" tech index down 0.44%. Notable declines included Tesla down 1.65%, Microsoft down 0.72%, and Amazon down 0.63% [8] - Chinese concept stocks also saw a majority decline, with the Nasdaq Golden Dragon China Index down 0.71% and the Wande Chinese Technology Leaders Index down 2.62% [10] Group 3: Federal Reserve Meeting Minutes - The Federal Reserve's meeting minutes indicated that the market expects two to three interest rate cuts this year, reflecting a consensus among survey respondents [17] - The minutes highlighted the need for a flexible monetary policy strategy that can adapt to various economic conditions, suggesting a robust approach to inflation targeting [17] - The report noted a significant steepening of the Treasury yield curve, with short-term yields decreasing by approximately 20 basis points while long-term yields generally increased [18]

Core Viewpoint - The Federal Reserve's recent meeting minutes indicate a consensus among officials to maintain the current interest rate policy due to rising economic uncertainty, reflecting a cautious approach towards inflation and employment risks [1][2] Group 1: Economic Outlook - The Federal Reserve decided to keep the federal funds rate unchanged at the range of 4.25%-4.5% for the third consecutive time, citing sufficient space to wait for clearer signals regarding inflation and economic outlook [1] - Economists believe that tariffs will likely increase inflation and suppress economic growth, with the Fed staff lowering growth forecasts for 2025 and 2026 [1] Group 2: Labor Market and Inflation - The Fed staff predicts a significant weakening in the labor market, with unemployment expected to rise above the "natural rate" this year and remain high until 2027 [2] - Inflation expectations have become a focal point for policymakers, with nearly all participants acknowledging the risk of more persistent inflation than previously anticipated [2] Group 3: Monetary Policy Framework - The minutes indicate ongoing discussions regarding the periodic evaluation of the monetary policy framework, with a potential shift towards a "flexible inflation targeting" approach, allowing inflation to exceed 2% temporarily without compensating for past deviations [2]

Core Viewpoint - The Federal Reserve's meeting minutes indicate that the benefits of the flexible average inflation targeting framework have diminished in a high-risk environment, prompting a reconsideration of the strategy [1] Group 1: Inflation Targeting Framework - Participants discussed the pros and cons of flexible average inflation targeting and flexible inflation targeting [1] - Under flexible average inflation targeting, monetary policy aims to compensate for periods of inflation below the target to achieve a 2% average inflation rate [1] - In contrast, flexible inflation targeting seeks to restore the inflation rate to 2% without compensating for previous deviations from the target [1] Group 2: Economic Environment Considerations - Participants noted that the risks associated with the effective lower bound (ELB) of policy rates are more pronounced when inflation remains persistently below target [1] - The flexible average inflation targeting framework may help limit the downward risk to long-term inflation expectations in such scenarios [1] - However, the benefits of this framework have weakened in environments with high inflation shock risks or when the risk of hitting the effective lower bound is low [1] Group 3: Policy Strategy Reevaluation - There is a consensus among participants on the need to reconsider the wording in the "Statement on Longer-Run Goals and Monetary Policy Strategy" regarding average inflation targeting [1] - An effective monetary policy strategy must be adaptable to various economic conditions [1] - Participants believe that a flexible inflation targeting strategy is a more robust policy approach to address persistent deviations from the committee's 2% long-term inflation target [1]