Investors are hoping that Powell’s speech at this weekend’s Jackson Hole retreat can clarify where interest rates are headed. Will it?

Minutes of the Fed’s July meeting released Wednesday showed that although officials voted 8-2 to cut their benchmark rate by a quarter point, there was a wider divergence of opinion on the committee than the two dissenting votes against the rate cut had indicated

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US Federal Reserve Chairman Jerome Powell during the Jackson Hole economic symposium in Moran, Wyoming on Friday, August 24, 2018. Photo: Bloomberg

Published: 2:39pm, 23 Aug 2019Updated: 2:39pm, 23 Aug 2019

Against the backdrop of a vulnerable economy, Federal Reserve Chairman Jerome Powell takes centre stage Friday with the financial world seeking clarity on whether last month’s first Fed rate cut in a decade likely marked the start of a period of easier credit.

The confusion has only heightened in the days leading to the annual gathering of global central bankers in Jackson Hole, Wyoming, at which Powell will give the keynote address.

Investors are looking for a clearer signal from Powell that he and other members of the Fed’s interest rate committee support further rate cuts to counter a slowing global economy and calm turbulent markets. Yet they might not get it.

Minutes of the Fed’s July meeting released Wednesday showed that although officials voted 8-2 to cut their benchmark rate by a quarter point, there was a wider divergence of opinion on the committee than the two dissenting votes against the rate cut had indicated.

The minutes showed that two Fed officials favoured a more aggressive half-point rate cut, while some others adopted the polar opposite view: They felt the Fed shouldn’t cut rates at all.