Goldman Sachs thinks that Federal Reserve Chair Powell’s speech will be the highlight of the Jackson Hole Symposium. His address usually has the biggest impact on the market. The firm expects a return to flexible inflation targeting as a key Fed strategy. Investors will mainly look for insights about the US economic outlook and any updates on the Fed’s monetary policy.

Keep an Eye on Side Interviews

The firm recommends watching side interviews for policy clues, especially any unexpected comments from ECB or BOE officials about inflation or policy changes. These unscheduled remarks could affect the markets, particularly Forex, if they diverge from what’s currently expected. ECB President Lagarde and BOE Governor Bailey will also be present at the symposium, joining a panel on Saturday. Their participation is noteworthy as attendees will be eager to learn about their economic views and policy approaches. With Powell’s speech coming up this week, we are getting ready for changes in interest rate expectations. The market will focus on his take on the economic outlook, especially after the modest 1.5% GDP growth seen in the second quarter of 2025. A shift to flexible inflation targeting might mean the Fed will adopt a more patient approach, even while the core CPI remains at 2.8%. This possible policy change introduces uncertainty, which can be an opportunity for options traders. We’re considering positions that could benefit from increased volatility in interest rate futures, as the direction of monetary policy may become less certain. This situation reminds us of the large market fluctuations following Powell’s hawkish Jackson Hole speech in 2022, showing how one speech can influence the market for months.

Market Movement Potential

We believe the main event won’t be the only source of market movement. Unscheduled comments can surprise traders. This year, side interviews with ECB President Lagarde or BOE Governor Bailey are particularly significant. Any unexpected remarks from them about inflation or policy could lead to notable price changes, especially in currency markets. We are specifically monitoring the foreign exchange markets for signs of policy differences. With the Eurozone’s July 2025 manufacturing PMI data showing a decline at 48.5, any dovish signals from Lagarde could push the EUR/USD pair lower. Therefore, considering options like buying puts on the euro might be a smart way to bet on this possible outcome. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now