Core Viewpoint - The upcoming Jackson Hole Economic Symposium is expected to be a critical platform for Federal Reserve Chairman Jerome Powell to address inflation, employment, and political pressures, with market participants keenly awaiting his signals regarding interest rate adjustments [1][2][3]. Group 1: Market Expectations - Investors are concerned that Powell may counter the growing expectations for aggressive interest rate cuts, which could lead to market volatility [1][2]. - Historical data shows that the "Jackson Hole week" typically yields positive returns for the S&P 500, with a median weekly gain of 0.8% since 2009 [4]. - The S&P 500's price-to-earnings ratio has reached 25.5, the highest since 2000, raising concerns about potential market corrections if Powell fails to meet dovish expectations [5]. Group 2: Economic Conditions - The economic environment in the U.S. has changed significantly since last year, with increased tariffs on imported goods contributing to rising inflation [2]. - Powell is likely to maintain a cautious stance, emphasizing the need for more concrete employment and inflation data before committing to any rate cuts [2][3]. Group 3: Monetary Policy Framework - The Federal Reserve is undergoing a review of its monetary policy framework, with discussions around transitioning from the "average inflation targeting" approach established in 2020 to a more flexible price level targeting system [7][8]. - The upcoming assessment in 2025 may lead to a shift towards a framework that better accommodates structural changes in the economy, such as global supply chain adjustments and demographic shifts [8][9]. Group 4: Future Projections - There is a high probability of a 25 basis point rate cut in September, with expectations for at least one more cut by the end of the year [6]. - The U.S. stock market may experience short-term fluctuations but could benefit from policy easing in the longer term, driven by factors such as AI investments and improving corporate earnings [6].