The midweek pullback was partly fueled by comments from Treasury Secretary Scott Bessent, who initially dismissed the notion of the U.S. adding Bitcoin to its strategic reserves. Although he later clarified that officials are still studying budget-neutral ways to build holdings, the initial market reaction had already been negative.

Recent trading patterns reveal growing skepticism that Powell will hint at a near-term policy pivot. Outflows from crypto ETPs have picked up sharply, totaling roughly $2 billion so far this week: about $927 million from Bitcoin and $1.14 billion from Ethereum. Still, month-to-date flows remain positive at +$1.8 billion. Despite softer language in the Fed minutes and weak payroll data, the path toward a more dovish Fed remains data-dependent — particularly on upcoming labor and Core PCE reports. For now, Powell seems unlikely to provide the certainty markets crave.

The July minutes underscored ongoing tensions within the Fed. Most participants judged that upside inflation risks outweighed slowing job market concerns, pointing especially to tariffs as a source of pressure. A majority of the 18 policymakers highlighted inflation’s persistence above target as their central worry, warning that expectations could drift if tariff effects linger.

Not all agreed. A handful of officials argued that risks looked balanced, while a couple emphasized deterioration in the labor market. As expected, Governors Christopher Waller and Michelle Bowman dissented, citing jobs weakness in their push for an immediate rate cut.

Powell has stayed silent on policy since July’s shockingly weak employment report, which strengthened the case for easing. At Jackson Hole, he is expected to strike a cautious tone — leaving September decisions open while avoiding firm commitments. Although markets are pricing in rate cuts, Powell will likely stress that incoming data remains key.

The irony is hard to miss: just two weeks ago, Powell downplayed labor market risks. Days later, payroll revisions suggested the jobs market may be closer to recession territory. With the symposium theme — “Labor Markets in Transition” — Powell will have little choice but to address the issue directly. He may point to unemployment as a better gauge of labor conditions than payrolls, while also highlighting immigration’s role in reshaping labor supply. The problem? If shortages were truly binding, wage growth should be stronger. It isn’t.

Talk of a “Jackson Hole Pivot” looks overstated. With Core PCE and another jobs report still to come, Powell is likely to remain deliberately vague. Advisors should prepare clients for muted guidance and the possibility that policy clarity may not come until September’s data is in.

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