Fed Chair Jerome Powell delivered his speech at the Jackson Hole economic symposium this morning. The tone and message of his speech was consistent with our expectations. In our view, the overall bias of his presentation was slightly dovish. He noted that the current unemployment rate remains too high and understates the underlying weakness in the labor market, as labor force participation remains lower than pre-pandemic levels. Although inflation is currently elevated, he continues to believe that at least some of the factors driving higher inflation will be transitory and cautioned that tightening monetary policy too soon could be detrimental to the labor market recovery. The Fed remains focused on its dual mandate of stable prices and full employment, but Chair Powell reiterated that the conditions needed to justify an increase in the fed funds rate would be more rigorous than the conditions needed to start tapering asset purchases.

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