Powell takes center stage ahead of September rate cuts: MAGGIE PAGANO

The question now is no longer whether the US Federal Reserve will cut interest rates in September, but by how much.

Unless August’s jobs figures are dismal, most traders are confident the central bank will cut rates by 25 basis points when it meets next month.

The latest retail sales figures released yesterday show that American consumers are holding their own, despite higher rates, and that the United States is not headed for a recession.

Combined with July inflation figures showing the smallest price rise in three years, the outlook is much brighter than just a week ago, when stock markets were in turmoil.

But if the next jobs report is worse than expected, indicating that the U.S. economy is faltering, the cut could be more aggressive, by 50 points, in a shock-and-awe operation to get the economy moving.

We should get a better sense of the mood when Federal Reserve Chairman Jerome Powell delivers his traditional opening remarks at the Jackson Hole economic symposium in Wyoming next Friday.

His speech will be closely scrutinized by markets around the world.

Traders want to know whether Powell can achieve a soft landing, certainly before the November election, which would be good news for Democrats.

In addition to giving their opinions on interest rates and enjoying famous fly fishing in the beautiful Wyoming national park, the world’s most influential bankers have to sing to earn their dinner.

The symposium hosts, the Federal Reserve Bank of Kansas City, have asked them to address the topic: “Reassessing the Effectiveness and Transmission of Monetary Policy.”

Although this sounds terribly boring, it is a loaded title; more of a confession than a debate. Central bankers are asked to explain why they have made such a huge mistake in monetary policy, first by being agonisingly slow to raise rates and now by being slow to lower them.

As economist Mohamed El-Erian recently wrote, central bankers must ask themselves how they managed to get their forecasts – whether on inflation or unemployment – ​​so wrong.

He also asks whether the Fed has enough confidence and humility to address two key questions: whether policy contributes to “economic well-being or harms it.”

In other words, shouldn’t the Fed put more emphasis on balancing the risks of damaging the real economy and employment, versus the risk of rekindling inflationary flames?

El-Erian gives a hint: he believes the Fed is staying silent on its 2% target, thereby de facto abandoning policy without having to say so. How funny!

Powell will no doubt be asked if this is correct. It’s not just the fish in Jackson Hole that are getting nervous.

Like buses…

First, a surprise survey by Bank of America reveals that the London Stock Exchange is Europe’s favourite stock market and that foreign investors plan to overweight UK stocks.

Now Deutsche Bank says the FTSE 100’s outperformance against its European rivals is notable.

Analysts point out that not only have UK stocks outperformed the EuroStoxx 50 by more than 10 percent, but volatility has been the lowest of any European index.

Investors should take an overweight position in UK stocks given higher corporate profits, lower inflation and a growing economy this year, they say.

With the latest GDP figures showing excellent growth, the outlook looks more encouraging by the day.

How Foreign Secretary Rachel Reeves must be eating her words.

Being next to the sea

Oh my god, teleworking is so passé. Now we have to find a beach cabin, because teleworking is a chic import from the West Coast.

That’s what former Chipotle Mexican Grill boss Brian Niccol is doing as the new head of Starbucks.

As part of his £88m pay package (yes, that’s right), Niccol will work from his home in Newport Beach, California.

Starbucks will cover the costs of a small office and transport you on the Starbucks plane to Seattle when needed.

Coffee, which is already exorbitantly priced, had better be worth it. If not, it’s time to fill up the thermos with instant coffee.