The global financial markets are eagerly awaiting a speech by Fed Chair Jerome Powell on the evening of August 22 at the Jackson Hole Annual Economic Policy Symposium. This speech is attracting significant follow due to the delicate turning point the U.S. economy is currently facing.

Currently, the U.S. economy is facing multiple challenges. On one hand, core inflation indicators continue to rise, far exceeding the 2% target set by the Fed. This is largely due to rising production costs, with companies passing some of these costs onto consumers. On the other hand, there are signs of cooling in the job market, with new job creation falling short of expectations and the unemployment rate rising, particularly in manufacturing and trade-related sectors.

The contradiction between inflation and employment poses significant challenges for the Fed's policy-making. Finding a balance between curbing inflation and maintaining employment will be one of the key points of Powell's speech.

At the same time, the financial markets have high expectations for the actions that the Fed is about to take. According to data from the CME Group, the market widely expects the Fed to cut interest rates by 25 basis points at the September meeting, with the probability of this expectation exceeding 70%. This reflects investors' concerns about economic downside risks and their hopes for the Fed to take measures to stabilize the economy.

The yield curve in the bond market also confirms this expectation. The decline in long-term bond yields suggests that the market is taking a cautious stance on the future economic growth outlook.

How Powell's speech will interpret the current complex economic situation and the future policy direction of the Fed will undoubtedly have a significant impact on global financial markets. Whether investors, businesses, or ordinary citizens, all will closely follow the signals conveyed by this speech to assess the future trajectory of the U.S. economy and its impact on the global economy.