GRAND IDEAS AT THE GRAND TETONS
Jeffrey Roach, PhD, Chief Economist, LPL Financial
Lawrence Gillum, CFA, Chief Fixed Income Strategist, LPL Financial
As central bankers, economists, and policymakers gathered last weekend in Wyoming’s Grand Teton National Park for the 2025 Jackson Hole Economic Symposium, the Federal Reserve (Fed) found itself at a critical juncture marked by political pressures, personnel changes, and internal divisions over monetary policy direction. Markets have positioned for dovish signals with 85% odds of a September rate cut, but historical patterns suggest Jackson Hole speeches often trigger reversals, as seen in 2022 when 2-year Treasury yields surged over 100 basis points following Fed Chair Jerome Powell’s hawkish remarks. The Fed’s simultaneous management of interest rate policy, personnel changes, quantitative tightening, and mounting political pressure from the White House represents an unusually complex policy environment. Fixed income investors face elevated volatility across markets as the institution that has long prided itself on independence and consensus navigates both external political pressures and internal disagreements during a period of mixed economic signals.