Fed, lies and statistics

For the last time, Jerome Powell will attend the Jackson Hole symposium as Fed chair. What will his swan song be? The markets, not to mention the White House, would like a clear commitment to lower policy rates in September and beyond. Economic data – some of which is questioned by the Trump administration – does not all point in that direction, far from it. The context is unusual. Trump has gone on the offensive against the Fed. To put his own people in place, he has to get rid of those he does not like. All means are fair game, including intimidation and threats. We do not believe that the risk of politicising the Fed is being fully factored in.