The Fed's efforts to reverse its easy policy will be a dominant theme for markets in the week ahead, as central bankers gather in Jackson Hole, Wyo.
But it will be the Fed that will matters most, as investors will also keep an eye on how the economy is responding to the spread of the Covid delta variant. Stocks were lower in the past week, with theThere could be some volatility around the Fed's symposium, after the the release of minutes from the last official meeting rattled investors. Theof the Federal Open Market Committee as being ready to taper this year if the economy is strong enough.
As for Powell, "he's not going to announce taper. What we anticipate is that he's going to give a live speech that talks about a lot of the progress that has been made since the start of Covid, and there's a lot of it," said Cabana. He said Powell could reiterate that the Fed will be data dependent in its decision to taper, and that many Fed officials believe it could make sufficient progress toward that goal later this year.
Diane Swonk, chief economist at Grant Thornton, said Powell should provide a road map for how the Fed will taper, but with the caveat of being able to step back if Covid is more serious than expected.
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