Throughout his tenure, Federal Reserve Chair Jerome Powell has used the central bank’s annual research conference in Jackson Hole, Wyoming, as a platform for decisive messages. In 2022, he pledged to fight inflation at any cost, while last year he reaffirmed his commitment to supporting the labor market with promises of rate cuts as unemployment appeared to be rising.

But in his farewell address to the conference this year, before his term ends in May, Powell faces a difficult choice between the two paths, as conflicting economic signals have complicated his “data-dependent” strategy. Some indicators point to slowing growth, while others highlight persistent inflation risks. With colleagues divided over which threat is greater — inflation or unemployment — investors and the Trump administration strongly expect the Fed to cut rates at its September meeting.

What may prove more important than the cut itself, however, is how Powell frames the next steps in assessing an economy that shows signs of slowing in some areas yet resilience in others, with renewed hints of price pressures. Despite his adaptability, Powell may be forced to remain squarely between the Fed’s dual mandates: price stability and maximum employment.

Richard Clarida, former Fed vice chair and now global economic advisor at PIMCO, said: “The Powell I know wants to be data-dependent and not move too early. If there is a cut in September, the real challenge will be communication: is it a one-off, or the start of five or six cuts? Even if they want to cut, the messaging will be tough.”

Powell’s speech, set against the backdrop of the Grand Teton mountains near Jackson Hole, will close out an eventful eight-year tenure marked by an unprecedented pandemic response, a wave of inflation that triggered record rate hikes, and personal criticism from President Trump.

In 2022, Powell invoked the legacy of former Fed Chair Paul Volcker, vowing to crush inflation “whatever it takes,” even at the cost of jobs and growth. Today, he faces pressure to emulate Volcker’s successor Alan Greenspan, whom Powell has often cited in Jackson Hole, by looking beyond inflation signals and steering rates back to a “neutral” level near 3%, down from the current 4.25%–4.5%. That level is no longer restrictive to growth and would be appropriate if policymakers feel confident inflation is returning to the 2% target.

Looking Ahead

Inflation remains about a percentage point above target, with signs it could rise further. Still, the Trump administration argues that the risk of sustained price growth is limited and will be offset by regulatory rollbacks and productivity gains.

Treasury Secretary Scott Bessent criticized the Fed, saying: “They are trying to be more data-dependent, and I think that’s a mistake,” noting that such an approach forces policymakers to wait for confirmed disinflation, while Greenspan in the 1990s “was forward-looking,” betting on a productivity surge that ultimately helped tame prices.

Fed Governor Christopher Waller, seen as a leading candidate to succeed Powell on Trump’s shortlist, has made similar arguments for downplaying tariff-driven inflation risks. He has called for immediate rate cuts to protect a softening labor market, in contrast to colleagues urging more caution.

Powell himself has so far aligned with this cautious camp. From the start, he emphasized acting on real data rather than models or forecasts, ready to move swiftly if needed but always with restraint. While this approach helped avoid premature mistakes, it left him vulnerable to lagging responses, given the delays in monetary policy effects and the risk of later data revisions. Indeed, the Bureau of Labor Statistics recently slashed prior job growth estimates for May and June in a historic downward revision, bolstering Waller’s case that the labor market is weaker than it appears.

Clearing Fog?

With growth slowing to around 1%, administration officials such as Bessent now stress that the broader data picture is weaker than last September, when Powell supported jobs with a half-point cut. They ask: if the economy is weaker, why not cut now?

They also point to contradictions between the “data-dependent” slogan and the Fed’s decision to halt rate cuts earlier this year over future tariff concerns. Trump’s tariffs came in far higher than expected, and while the fallout has not been as severe as some economists warned, the Fed has only recently expressed more confidence about the outlook.

Richmond Fed President Thomas Barkin said: “The fog is clearing,” suggesting greater clarity in economic projections.

Powell must now define how far that fog has lifted — whether conditions justify a sustained cutting cycle, a single cautious move, or continued patience.

What sets the backdrop apart from last year is that rates are already lower and less restrictive, equity markets are buoyant, unemployment remains steady, while inflation — which was falling month by month then — has recently shown little improvement and even signs of rising again.

Even Waller, who advocates rapid easing, acknowledged: “If I’m wrong about inflation or labor market weakness, we can hold policy steady for a meeting or two.”

Most US stock indexes declined on Tuesday, with the Dow Jones Industrial Average the only major gainer as investors assessed earnings from large retailers offering clues about consumer spending.

Home Depot shares rose 2% after the home improvement giant reaffirmed its full-year outlook, despite second-quarter earnings missing analysts’ estimates. Other major retailers including Lowe’s, Walmart, and Target are scheduled to report results later this week.

Attention now shifts to Federal Reserve Chair Jerome Powell, who will deliver remarks later this week that could signal the central bank’s policy stance for the rest of the year. Powell is set to meet with global central bankers at the Fed’s annual Jackson Hole symposium in Wyoming.

According to the CME FedWatch Tool, markets are pricing in an 83% probability of a 25-basis-point rate cut at the Fed’s September meeting.

In trading, as of 16:39 GMT, the Dow Jones Industrial Average rose 0.2% (70 points) to 44,980. The S&P 500 fell 0.3% (20 points) to 6,429, while the Nasdaq Composite dropped 1% (222 points) to 21,407.

Palladium prices declined on Tuesday amid a weak performance of the US dollar against most major currencies and as markets monitored White House meetings aimed at resolving the Russia-Ukraine conflict.

Russia-Ukraine war

Trump revealed the next steps in his peace-brokering efforts through Truth Social, following a full day of meetings at the White House with Ukrainian President Volodymyr Zelensky and European leaders seeking guarantees to protect Ukraine from future Russian aggression.

After the talks concluded, Trump said he called Russian President Vladimir Putin to discuss arrangements, noting that he spoke with him for about 40 minutes in the Oval Office without the European leaders present. He added, “Everyone is very happy with the possibility of peace between Russia and Ukraine.”

The announcement came amid Trump’s intensified efforts to end a conflict that began more than three years ago with Russia’s invasion of its smaller democratic neighbor. Trump had traveled to Alaska on Friday to meet Putin in person, then swiftly invited Zelensky and European leaders to the White House on Monday to push progress further.

The summit hosted by Trump carried an extraordinary atmosphere, resembling scenes from World War II, as Western leaders gathered under one roof hoping to end a conflict between a fragile European democracy and a major dictatorship seeking to seize more territory.

Trump met Zelensky at the White House for about an hour in a fast-moving attempt to end the war on terms acceptable to both sides. They then joined European leaders in pursuit of a breakthrough in a conflict that Trump himself warned could escalate into a third world war if it continued.

Trump welcomed Zelensky with a smile and warm handshake, contrasting with their tense February meeting. Zelensky had set aside his usual military attire, instead wearing a dark formal jacket. When Trump remarked, “I like it!” Zelensky replied, “It’s my best.”

After his most recent summit with Putin, Trump sat down with Zelensky to work through disputes over Ukraine’s future security and the status of territories held by Russian forces in the east and south of the country. Zelensky later said their private meeting was excellent, adding, “Perhaps our best meeting.”

Asked whether US troops would help secure any peace deal, Trump did not rule it out. Putin insists on retaining about 20% of Ukrainian territory currently under Russian control in exchange for ending the war, while Zelensky says Ukraine’s constitution prevents him from ceding any land.

Trump told the press in the Oval Office before the closed-door session: “It’s never the end of the road. People are being killed and we want to stop it. I think we have a good chance to achieve that.” Zelensky stressed: “We must stop this war. To stop Russia, we need American and European support.”

Following the bilateral meeting, Trump and Zelensky moved immediately to talks with European leaders, including French President Emmanuel Macron, UK Prime Minister Keir Starmer, German Chancellor Friedrich Merz, Italian Prime Minister Giorgia Meloni, NATO Secretary-General Mark Rutte, and European Commission President Ursula von der Leyen. Trump said before the meeting: “I think today we will reach a solution on almost everything, including security most likely.”

After the discussions, Trump and European leaders went to the Oval Office to continue, according to a White House official. He noted that Europe would play a major role in any deal, as European states want to prevent future Russian attacks, while the US may also contribute to security guarantees — a surprising admission from a president who has championed “America First.”

Still, when asked if he was prepared to deploy US forces to Ukraine to secure a deal, Trump did not dismiss the idea, saying: “We will work with Ukraine and with everyone, and we will make sure that if peace happens, it will be lasting peace.”

The tone this time was more amicable than Zelensky’s February visit, when Vice President JD Vance criticized him for showing insufficient gratitude to Trump. This time, Vance remained silent.

Industrial metals

Russia is one of the largest producers and exporters of industrial metals such as palladium and platinum. Any potential easing of Western sanctions against Moscow could increase global supply of these metals.

Reports also suggested that US President Donald Trump may offer Russian President Vladimir Putin access to rare earth minerals as part of a bid to end the war in Ukraine.

On the trading front, palladium futures for September delivery fell 0.9% to $1,122 per ounce by 16:20 GMT.

Cryptocurrency markets faced a sharp decline at the start of the week, as mounting macroeconomic concerns triggered more than $500 million in forced liquidations of long positions.

Bitcoin slipped 1.1% to $116,394.87 after hitting a record high of $124,496 last week – its fourth all-time high this year. At one point during trading, Bitcoin fell to a daily low of $114,706. Ethereum also dropped 2.5% to $4,354 after nearing its record of around $4,800 last week. The decline came after July’s producer inflation data came in hotter than expected, raising doubts over a Federal Reserve rate cut in September.

Profit-taking drove broad market liquidations. According to CoinGlass data, 123,836 traders were liquidated over the past 24 hours for a total of $530.79 million, including about $124 million in Bitcoin longs and $184 million in Ether. Such liquidations occur when traders are forced to sell assets at market price to cover debts, exerting further downward pressure.

Investor sentiment was further dampened by Treasury Secretary Scott Bessent, who clarified Thursday that President Donald Trump’s Bitcoin strategic reserve announced in March would be limited to government-seized coins, as part of a “fiscally neutral” approach to expanding holdings.

Major cryptocurrencies fell alongside blue-chip tokens, with the CoinDesk 20 index, which tracks the broader market, down 1.2%. Crypto-linked stocks also declined, with Bitmine Immersion down 5.4% and Bullish, which went public last week, sliding 8.9%. Coinbase gained 1.0% while Galaxy Digital rose 2.2%.

Focus on Jackson Hole

Investors this week await the Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, for clues on upcoming monetary policy decisions. Crypto traders also look to Thursday’s jobless claims data.

Last week’s record tests for Bitcoin and Ether surprised traders who had expected seasonal weakness in August, seeing macro concerns overshadow institutional adoption momentum until the Fed’s September meeting. Still, many view the pullback as more strategic than alarming, supported by ongoing demand from ETFs and companies steadily buying Bitcoin and Ether.

Despite net outflows from Bitcoin and Ethereum ETFs on Friday, the week ended with $547 million in net inflows for Bitcoin and a record $2.9 billion for Ethereum – marking Ether’s 14th consecutive week of inflows. Bitcoin remains little changed month-to-date, while Ether is up 15%.

Geopolitics and Fed Policy Add Pressure

Political uncertainty has also weighed on sentiment, as markets reacted to Monday’s White House summit where President Trump met Ukrainian President Volodymyr Zelensky and European leaders to discuss peace efforts.

Trump hinted at potential direct talks with both Moscow and Kyiv, and even a possible trilateral summit, while Zelensky expressed cautious optimism without concrete outcomes. The lingering geopolitical risks added pressure on high-risk assets such as cryptocurrencies.

Attention also turns to Fed Chair Jerome Powell’s speech Friday in Jackson Hole. With expectations for a larger September rate cut fading, markets now price in an 83% chance of a 25 basis-point cut, down from bets on a more aggressive move.

Companies Buy the Dip

Despite Tuesday’s drop below $115,000 – nearly 6% off the recent record – treasury firms such as Metaplanet and Strategy added a combined 1,185 Bitcoin Monday, taking advantage of lower prices.

According to QCP Capital, implied volatility remains relatively low, suggesting markets do not expect a major price breakout. Analysts said: “Range-bound trading is likely to persist, with dips near $112,000 attracting buyers and rallies toward $120,000 meeting selling pressure – at least until Powell’s speech Friday.”

CryptoQuant data on long-term holder (LTH) profitability show current levels remain positive yet moderate, with profits below peaks from 2017, 2018–2019, and 2022–2023 cycles. This suggests Bitcoin trades near historic highs but with manageable selling pressure, leaving room for further upside.

Outlook: Momentum Indicators Show Weakness

Bitcoin peaked at $124,474 last Thursday but quickly lost momentum, sliding 4% the same day to settle around $117,300 over the weekend. On Monday it extended losses to close below $116,300. As of Tuesday, it continued lower, breaking the uptrend line established since early April.

If Bitcoin closes below the 50-day exponential moving average (EMA) at $115,046 and the daily uptrend line, losses could extend toward the next support at $111,980.

On the daily chart, the Relative Strength Index (RSI) stands at 44, below the neutral 50, reflecting bearish momentum. The MACD also flashed a negative crossover Sunday, sending a sell signal suggesting further downside.

However, if Bitcoin finds support near the EMA at $115,046 and closes above $116,000, chances for recovery toward the key $120,000 level could improve.