Waiting for Powell

The masters of monetary policy are gathering for the Fed's annual Jackson Hole symposium. Enda Curran writes today about the tension around Chair Jerome Powell's speech tomorrow. Plus: How Volkswagen's EVs brought it back from scandal.

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The annual pilgrimage of central bankers to the Wyoming mountain resort of Jackson Hole doesn't usually light up the public's imagination, given that it's typically dominated by impassive policy wonks discussing academic papers and the nuances of setting interest rates.

This year, however, has the potential to be a blockbuster.

That's because the annual Economic Policy Symposium, which the Kansas City Federal Reserve Bank has hosted since 1978, comes against the backdrop of searing White House criticism of the Fed for not lowering interest rates and at a moment when the economy is sending mixed signals on where it's headed. Any decisions on monetary policy in the coming months will be very finely balanced. Do officials worry more about inflation or growth?

The highlight will come on Friday when Fed Chair Jerome Powell takes to the podium. Markets will be hanging on his every word for any hint that rates will be cut in September. Last year, Powell used his speech to hint at a policy shift, and he followed with a hefty cut soon after.

Powell at the Jackson Hole event in 2023. Photographer: Bloomberg

For Powell, though, the case to lower rates may not be clear cut. Although the labor market has weakened, inflation remains persistent. Wholesale prices in July saw their fastest increase in three years. Which is why some economists expect Powell to deliver a nuanced message, keeping his options open in the event the data throws up more surprises.

That sort of policyspeak would be music to the ears of the central bankers in the audience (who will include the leaders of the European Central Bank and the Bank of England), but those in the White House would probably be disappointed.

Since returning to office in January, President Donald Trump has poured scorn on Powell for not bringing down borrowing costs. The ferocity of that criticism from Trump and some of his closest advisers is a clear threat to the central bank's independence from day-to-day politics.

"The damage he has done by always being Too Late is incalculable. Fortunately, the economy is sooo good that we've blown through Powell and the complacent Board," Trump wrote Tuesday in a social media post, adding that he is weighing a lawsuit against Powell over the renovation of the central bank's headquarters, a project whose cost overruns have drawn scrutiny. For good measure, Treasury Secretary Scott Bessent last week also made the case for a 50-basis-point cut at the Fed's next meeting on Sept. 16-17.

Powell has so far batted away the political criticism and continues to focus on the economic data, even as the White House has begun the process to replace him when his term as chair ends in May.

It's that combination of the economy reaching a critical juncture while the politics around the Fed are so combustible that means this year's Jackson Hole event has the potential to make bold headlines.

That may not be the Fed's preference—policymakers prefer to stay on the business pages rather than the front ones—but the hot political climate right now means this is no ordinary time for anyone, and central bankers aren't excluded.

RELATED: The Justice Department plans to investigate Fed Governor Lisa Cook and has encouraged her removal from the board.

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Getting Its Shine Back

Photographer: Matthias Balk/Getty Images

Volkswagen AG was in a downward spiral that threatened the venerable automaker's very survival. It was September 2015, and the "clean diesel" fairy tale VW had peddled to consumers for years was revealed for the lie that it was. The German giant had outfitted millions of cars with software to cheat on tailpipe emissions tests, triggering a rebuke from the US government and a corporate reckoning that cost Volkswagen €32 billion ($37.2 billion) in fines, legal fees and recall costs, along with unmeasurable damage to its reputation. Berthold Huber, interim chairman at the time, called the affair a "political and moral catastrophe," and Wolfgang Porsche, a patriarch of the billionaire Porsche-Piëch clan that controls the company, deemed it a "crisis of trust."

To regain its green credentials after Dieselgate, as the affair came to be known, the German carmaker pivoted—aggressively—to electric vehicles. In March 2021, Volkswagen said it aimed to sell more EVs than Tesla Inc. globally by 2025. That, too, hasn't gone as planned. Early models flopped because of VW's buggy software and flagging consumer interest in battery-powered autos, particularly in Europe. The company was slow to roll out competitive EVs in China, where local manufacturers now dominate the market. And US buyers have never really gotten very excited about the company's electric offerings.

Now Volkswagen is trying to pivot once again. Since taking the helm three years ago, Chief Executive Officer Oliver Blume has built partnerships with software and EV startups to improve his company's products. Audi, Porsche and the VW nameplate are cutting costs to bolster earnings. And more affordable brands such as Cupra and Skoda are making inroads with younger, price-conscious buyers.

Monica Raymunt has the details on how the automaker's electric efforts are gaining traction: Volkswagen EVs Outsell Tesla in Europe a Decade After Dieselgate

A Plane Deal

500

Boeing is hammering out a deal with China for as many as 500 aircraft, according to people familiar with the matter, a transaction that would end a sales drought that stretches back to Trump's last visit in 2017.

The GOAT of Weight Loss

"I trained at the highest level, ate a clean diet, pushed myself, and still, after having kids, my body just wouldn't respond. I realized it wasn't about willpower; it was biological. My body needed the GLP-1 and clinical support."

Serena Williams

Tennis superstar

Williams says she lost 31 pounds using a weight-loss drug through the telehealth startup Ro, and is now the face of a new campaign for the company. Her husband, Alexis Ohanian, is an investor in Ro and sits on the company's board.