JPM: Powell To Push Back Against Pivot; BMO: Could Affirm 75bp Uncommon

While JPMorgan sees the data since the July meeting pointing "in the direction of" a 75bp September hike, they don't expect Powell at Jackson Hole "to tip his hand on the size of the next move, which will depend on upcoming releases."

• JPM expects Powell to note "that activity indicators have been mixed but the labor market remains exceptionally tight and inflationary pressures are still building. In so doing, we believe he will push back against the idea that a dovish policy pivot is coming anytime soon. Instead, we expect he will remain steadfast that “ongoing” rate increases are needed to regain price stability."

BMO notes as a backdrop to Jackson Hole that "most Fed officials have warned that they are far from calling a truce in the inflation battle and that market expectations of rate cuts next year are premature", with the minutes confirming that future hikes are data dependent "though they also noted (for the first time) that policymakers are starting to worry about overtightening".

• BMO eyes a 50bp September hike, so "we'll see if [Powell] affirms" the point that he doesn't expect 75bp hikes to be common.