Core Viewpoint - Deutsche Bank's Chief Economist Matthew Luzetti indicates that the new monetary policy framework adopted in 2020 is not the primary cause of the Federal Reserve's delayed response and inflation overshoot, but it has objectively contributed to these outcomes [1] Group 1 - Luzetti expects Fed Chair Jerome Powell to emphasize the revision of the Fed's long-term goal statement to align more closely with reality during his key speech on Friday [1] - Potential revisions may include the removal of the 2020 reform content and the re-establishment of the priority for preventive policies [1] - The upcoming speech coincides with a policy turning point, and Luzetti anticipates Powell will also adjust his statements regarding the labor market [1]

Group 1 - The Jackson Hole central bank conference is set to begin, with a focus on Federal Reserve Chairman Jerome Powell's final speech, which is expected to be more dovish amid rising market expectations for interest rate cuts [1][2] - Recent weak employment data has led to increased market speculation that the Federal Reserve will cut rates by at least 25 basis points in September, with another cut anticipated later in the year [1][3] - President Trump has expressed concerns about Powell's stance on interest rates, particularly regarding the impact on the real estate market, indicating a push for significant rate reductions [2][3] Group 2 - The U.S. real estate market is struggling, with low inventory pushing prices up; a significant rate cut is seen as necessary to stimulate housing construction and market recovery [3][4] - The Dow Jones U.S. Homebuilders Select Index has shown a technical upward trend, indicating market optimism driven by rate cut expectations, with notable increases in individual stocks such as D.R. Horton and Lennar [3][4] - Market analysts believe that sectors traditionally benefiting from rate cuts have been performing strongly, reflecting confidence in the Federal Reserve's potential return to a rate-cutting cycle [4] Group 3 - The Federal Reserve's current monetary policy framework, established in 2012, is under review, with potential changes to be implemented after Powell's term ends in May 2024 [4][5] - There is speculation that the Federal Reserve may abandon the "average inflation targeting" strategy, which was deemed ineffective in the post-pandemic environment, in favor of a singular 2% inflation target [4][5] - Powell has previously indicated the likelihood of changes to the inflation strategy, acknowledging the increased volatility in inflation and the need for a reassessment of economic conditions since 2020 [5]

Group 1 - The Jackson Hole central bank conference is set to begin, with a focus on Federal Reserve Chairman Powell's final speech, which is expected to be dovish amid rising market expectations for interest rate cuts [3][5] - Recent weak U.S. employment data has led to increased market bets on a 25 basis point rate cut in September, with expectations for at least one more cut by the end of the year [3][5] - The two-year U.S. Treasury yield has seen the largest decline, reflecting the market's sensitivity to interest rate changes [3] Group 2 - Former President Trump has publicly criticized Powell, suggesting that his policies are harming the real estate sector and calling for significant rate cuts [5][6] - The U.S. Treasury Secretary has indicated that rate cuts could help the struggling real estate market, which has been facing low sales and new construction [6] - The Dow Jones U.S. Home Builders Select Index has risen above its 200-day and 50-day moving averages, signaling a technical uptrend in response to rate cut expectations [6] Group 3 - Market analysts note that sectors traditionally benefiting from rate cuts have shown strong performance, as investors anticipate a return to a rate-cutting cycle by the Federal Reserve [7] - The Federal Reserve's current monetary policy framework, established in 2012, is under review, with potential changes expected to be part of Powell's legacy after his term ends in May 2024 [7][8] - There is speculation that the Federal Reserve may abandon the "average inflation targeting" framework, which some believe contributed to misjudgments regarding inflation during the pandemic [8]

Core Viewpoint - The upcoming Jackson Hole central bank conference is highly anticipated, particularly for Federal Reserve Chairman Jerome Powell's final speech, with expectations leaning towards a dovish stance and potential interest rate cuts due to recent weak employment data [2][4]. Group 1: Market Reactions and Expectations - Following signals from the Trump administration regarding interest rate cuts, U.S. real estate stocks have seen a preemptive rise, with the Dow Jones U.S. Home Builders Select Index climbing above its 200-day and 50-day moving averages, indicating a technical bullish trend [6]. - The iShares U.S. Home Construction ETF (ITB) increased by 5.6% over the past week, with individual homebuilders like D.R. Horton Inc. and Lennar Corp. rising by 5.8% and 9.2% respectively [6]. - Notably, Warren Buffett's Berkshire Hathaway disclosed a new position of approximately $200 million in D.R. Horton and increased its stake in Lennar, reflecting confidence in the housing sector [6]. Group 2: Federal Reserve Policy Changes - The Federal Reserve's current monetary policy framework, established in 2012, is set for a review, with potential changes to be implemented after Powell's term ends in May 2026 [8]. - There is speculation that Powell may abolish the "average inflation targeting" framework, which was designed during a low-inflation period, in favor of a singular 2% inflation target due to the changing economic landscape post-pandemic [8]. - Powell hinted at the possibility of this change in a May speech, acknowledging that future inflation volatility may be significantly higher than in the previous decade [8].