​​Outlook on July FOMC minutes and Jackson Hole Symposium​

​​​Investors are awaiting fresh catalysts this week that could impact the outlook for US interest rates and stock indices.

​Key events that may influence market sentiment include the release of the Federal Reserve (Fed) July Federal Open Market Committee (FOMC) meeting minutes on Wednesday, and probably more importantly, Fed Chair Jerome Powell's speech at the Jackson Hole Symposium on Friday.

​The S&P 500 index saw a strong 4% gain last week, the largest weekly gain since November 2023. However, this week is expected to be quieter on both the news and earnings front until later in the week. The main potential market movers are thus projected to be the minutes from the Fed's July meeting and Powell's Jackson Hole speech, which could impact the US dollar, oil and gold prices, US yields and global stock indices.

​FOMC meeting minutes

​On Wednesday, the minutes from the last FOMC meeting will be released. While the Fed's rate decision is already known, the minutes could spark volatility if the reasoning behind the decision contains surprises.

​The FOMC kept the Federal Funds rate unchanged between 5.25%-5.50% at its July meeting, which was widely expected. In the accompanying statement, it noted that inflation was making progress towards its 2% target goal. The Committee also said that the risks of not achieving maximum employment and price stability have become more balanced.

​During the press conference, Fed Chair Jerome Powell indicated that a rate cut could be possible if inflation continues to fall, stating "a policy rate reduction could be on the table."

​The minutes from the July FOMC meeting are expected to reinforce expectations that the Fed will likely cut rates at its September meeting. Markets have already priced in a 25 basis point rate cut in September, with an additional 94 basis points of cuts anticipated by the end of the year. According to the CME FedWatch Toll there is also a 28.5% probability of seeing a 50 basis point rate cut in September.

​The tone of the minutes is forecasted to be dovish, supporting the expectation of rate cuts this year.

​Fed funds rate chart

​Jackson Hole Symposium

​The Jackson Hole economic policy symposium this week is expected to provide greater clarity on the outlook for the global economy and future monetary policy decisions by major central banks.

​There will be a particular focus on the speech by Fed Chair Jerome Powell on Friday, which is likely to lay the groundwork for an interest rate cut at the Fed's September policy meeting. However, since financial markets have already fully priced in such a rate cut, attention will instead turn to how much the Fed might cut rates in September and later meetings.

​Recent economic data show that inflation in the United States is moving closer to the Fed's 2% target, while strong US consumer spending continues to mitigate risks of an economic downturn. This suggests aggressive monetary policy easing may not be warranted yet, which could lead Fed Chair Powell to downplay expectations for a more substantial 50 basis point rate cut in September.

​However, he may retain a data-dependent stance on policy decisions for subsequent meetings. With a focus as well on labour market conditions, Powell may prefer to wait for additional data from next month's jobs report before committing to a larger rate cut.