It has been learned that Fed Chairman Jerome Powell's speech at Jackson Hole triggered a rise in risk assets. However, some investors are taking a cautious stance on Powell's dovish remarks, as they are concerned about the possibility of stagflation in the future and worry that the market may be overly optimistic.

Powell delivered his final speech as Fed chair at the Jackson Hole Economic Symposium on Friday. He hinted at a possible rate cut in September but did not make a clear statement, seeking an appropriate balance between the escalating risks in the labor market and the persistent concerns about inflation.
Powell's remarks were made against the backdrop of increasing pressure from the White House to ease monetary policy. The actions of the White House have raised market concerns that political factors may lead the Fed to cut interest rates too aggressively in the future.
Matthew Miskin, Co-Chief Investment Strategist at Manulife Investments, stated: "Powell has indeed locked in a rate cut for September, and this certainty is having a positive impact on global markets. This still leaves one question: what will happen after September? I believe this is where the market is overly optimistic."
Before the Jackson Hole meeting, the U.S. employment report for July performed poorly, with previously released employment data also being significantly revised down, raising market expectations that the Fed will cut interest rates from the current range of 4.25%-4.5% later this year.
However, in recent weeks, these expectations have gradually weakened as the surge in wholesale prices in July has raised market concerns that high inflation will limit the Fed's ability to rescue the economy through significant interest rate cuts.
Metl