Peter Boockvar, a prominent market analyst, has shared his predictions for Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Economic Symposium, emphasizing its potential market impact.
While acknowledging the possibility of a September rate cut based on employment data, Boockvar anticipates Powell to remain deliberately vague about the specific magnitude of the cut. In an interview with CNBC’s “Fast Money,” Boockvar stated that Powell “is not going to tell you 25 or 50 [basis points], and he’s not even going to tell you what he’s going to do after that, because they don’t know.”
Boockvar further highlighted that corporate earnings, particularly Nvidia’s upcoming quarterly results, will hold more weight in influencing market sentiment than Powell’s commentary. He believes Nvidia, a leading player in the AI technology sector, will cap the AI trade next week.
The market historically exhibits sensitivity towards Powell’s pronouncements regarding short-term monetary policy. In 2022, Powell’s suggestion of a 75 basis point hike triggered a surge in Treasury yields and a decline in equities. Investors are currently awaiting Powell’s speech with heightened interest, as US stocks closed lower on Thursday.
The current market sentiment, as reflected in the CNN Money Fear and Greed index, remains in the “Neutral” zone. Notably, several Federal Reserve members have recently hinted at a potential shift towards easing interest rates. Boston Fed President Susan Collins and Philadelphia Fed President Patrick Harker have both indicated that the central bank might consider lowering rates as early as September.
