Powell's Jackson Hole Speech: What's At Stake for the Markets and Investors 8/22/25

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Market insight and analysis. You're listening to the opening bell of CNBC Squawk on the Street.

Carl Quintanilla (1:07)

Today is the day of the street, and global markets have been waiting for in about an hour. The Fed chair will deliver a keynote at the Fed Symposium in Jackson Hole, and of course we will bring it to you live. Good Friday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Sara Eisen, Mike Santoli at Post 9 of the New York Stock Exchange. Cramer and Faber have the morning off. Equity is going into the speech with some green arrows, but S&P coming off a five day losing streak for the first time since January. Let's of course begin with the Fed chair in Jackson Hole later this morning. Our Steve Leesman is there. Big day, Steve.

Steve Liesman (1:38)

Yeah, a little light on the mountains, and maybe we'll get a little light shed on how the Fed chair feels about where we ought to be going with interest rates. And I think this is important for a couple of reasons. Obviously, it'll provide some guidance to the market, but also guidance to the very, I'd say divided committee and the opportunities we've had to chat with the committee members. There's very, very different views. And we had Patrick Harker, the former Philly Fed president who really just left office in June. He talked about the fuzziness of the data. And I think that has led to the different interpretations of what the right outlook is among committee members. I divide it like this, a couple of folks ready to cut right now, they were ready to cut in July. And a bunch of folks who say we shouldn't cut at all. And a couple of really a very large middle of folks who say, I want to wait and see. And I think Powell is going to lean on that in the sense that there's still quite a bit of data. Another inflation report, another employment report, the benchmark revision September 9th, write that down in your calendar. That'll be important for shaping the views. And then more data, of course, on inflation and from companies and listening to those earnings reports about how the tariff are working through. And then some discussion, I would say, among committee members about the idea of in the inflation report we just had, there was not just kind of tariff linked inflation, but tariff on the inflation on the service side that caused some concern, guys.

Sara Eisen (3:00)

I mean, I guess so. What is the likelihood, Steve, that he's going to say anything definitive about September, given we still have another big inflation report and another big jobs report before that?

Steve Liesman (3:12)

I think it will be subtle, Sara. I think that's probably a more operative word. I think it will be a bit of a Rorschach test in terms of people who look at it, who think the Fed is going to cut. They'll see what they want in it. And people who don't think the Fed ought to be cutting here, don't think the Fed will cut, they'll see something in it. I think you're right. I think the idea is maximum flexibility. And it's really fascinating, Sara, to look at how the futures market has traded.

All of the chatter out there from the Fed committee members has providing flexibility to the Fed in terms of where we're at right now. If you look at the futures markets where it's 65% probability of a cut, 35% probability of a hold for September, the cuts eventually are worked in and priced in as the year goes by. But they're pushed ahead. And I think that might be something that's working in Powell's favor that gives him the ability to react to the data. I don't think Powell wants to push the market away from a cut right now. I think if that's warranted, let the data do the talking, let the data do the pushing in terms of where the market is priced. If that data comes in with a strong jobs report, the market might price out that September cut and provide the Fed the flexibility to cut or not to cut. And if it comes in weak again, with a huge debate, Sara, that you and I have been discussing, which is what's the right run rate or the right equilibrium rate for a jobs market where you're losing people in the labor force because of the immigration and deportation policies of the administration.