Each year, the world’s leading central bankers gather at Jackson Hole in Wyoming to assess the state of the global economy. For all the caveats that always accompany central bankers’ speeches, the mood at this year’s gathering, two weeks ago, was positive. With inflation falling and recession fears diminishing, a “soft landing” for the global economy looks within reach.
In his speech at Jackson Hole, Jay Powell, the chairman of the US Federal Reserve, signalled that the Fed is primed to cut interest rates. Markets assume that the Fed will reduce US rates at its next meeting on 18 September, the first US rate cut in four and a half years. The US is playing catch up with a number of western central banks, including the European Central Bank and the Bank of England, that have reduced rates in recent months.
