Highlights:

• Today’ Jackson Hole speech allowed chair Powell to cautiously add a slightly hawkish touch to main messages conveyed since July. Inflation is receding but still too high and may require further rate hikes and/or a longer period of tight policy.
• He pointed to upside risks to inflation stemming from still above trend growth and a still tight labour market. However, he also acknowledged the high uncertainty on the actual stance of monetary policy and the size of the policy lags. Therefore, the FOMC keeps refraining on any commitments.   
• We think the hawkish tilt was mainly meant to dash residual hopes of swift rate cuts. We stick to our view of no more rate hikes, but we move to Q2 the date of the first cut. Only surprisingly strong readings in the next employment and CPI reports would warrant a rate hike in September. 
   

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