Updated August 19, 2025
From Anchorage to Jackson Hole: Dissecting the Trump-Putin Meeting and What Powell Will Say This Week
From Anchorage to Jackson Hole: Dissecting the Trump-Putin Meeting and What Powell Will Say This Week
From Anchorage to Jackson Hole: Dissecting the Trump-Putin Meeting and What Powell Will Say This Week
Allio Capital Team
The Macroscope
From Anchorage to Jackson Hole: Dissecting the Trump-Putin Meeting and What Powell Will Say This Week
Presidents Trump and Putin walked down the runway in Alaska with the world watching, and there are key macro impacts
Fed Chair Powell speaks this Friday morning from tranquil Wyoming amid volatile economic conditions, but calm markets
We offer the key takeaways with so many geopolitical and monetary issues at hand
Macro investors have had a lot to digest just this month. A rocky July jobs report stoked stagflation concerns, last week’s CPI report was encouraging, and Retail Sales were on point. That’s all standard fare. But the geopolitical and macro chessboard may be jolted twice before August comes to a close:
First, by President Trump’s high-stakes summit with Russian President Vladimir Putin in Anchorage, Alaska, and second, by this week’s Jackson Hole Economic Symposium, where Fed Chair Jerome Powell delivers his annual speech from the shadows of the Grand Teton mountains.
It’s an action-packed stretch that is poised to shape how the rest of the year plays out for markets. No corner is bypassed. Stocks, bonds, commodities, and currencies are all in play. Our goal? To map out how these twin macro events fit in with the usual data.
What could a ceasefire between Russia and Ukraine look like for the struggling international Energy sector? Is the story of a burgeoning European defense arsenal, a key growth driver for the continent, in jeopardy? Back home, will Powell signal an interest rate cut in his address? Will he bow to pressure applied by President Trump? What will the candidates vying to be the next Fed chair have to say about it all?
This week bridges geopolitical power wielders with market-moving central bankers. Individual investors are doing some globe-trotting, given the one-two punch of the events in Anchorage and the Fed pow-wow in Jackson Hole. The overlap and its market implications are key to separating signal from noise as we approach 2025’s final stretch. Let’s begin with a trip to the nation’s last frontier.
Anchorage: Symbolism Without Substance...Yet
Last Friday’s Trump-Putin summit at Joint Base Elmendorf-Richardson on home soil was as much theater as diplomacy. The US rolled out the red carpet for the Russian leader, a man responsible for the deaths of millions of his own men and citizens of the many nation-states he has directed his forces to invade.
The scene included military flyovers, carefully choreographed handshakes, and all the pomp and circumstance you’d expect with President Trump playing the part of POTUS and TV director.
Putin & Trump Shake Hands in Alaska
Source: AP, Sky News
This was the first Russian presidential visit to US soil in a decade and the only post-invasion invitation to the West. As Putin stepped into the beast, and the motorcade pulled away, it may have marked a giant geopolitical leap. He and Trump spoke among a small circle of diplomats from both sides for about four hours, followed by a press conference last Friday night, after markets had closed.
The outcome? No ceasefire or peace deal. But the two presidents signaled that more meetings were likely. Toward the end of the media Q&A, Putin turned his head to Trump and asked in English, “Next time in Moscow?” Over the ensuing weekend, Trump confirmed that Ukrainian President Volodymyr Zelensky would visit the White House on August 18.
Putin reportedly offered no real concessions during the talks, though both leaders painted the meeting as productive. Trump, for his part, suggested future direct diplomacy as he prepared to debrief NATO and Zelenskyy.
It remains to be seen if land will be ceded to Putin or what new sanctions could be applied to Russia’s already strained economic system. It’s also possible that restrictions could be loosened if a broad agreement is reached. Trump might also play the waiting game, as some experts claim Putin may simply run out of money to fund the war he started in early 2022.
Trump a Nobel Peace Prize Winner? Odds Remain Low.
Source: Kalshi
How Markets Digested Anchorage
Putin’s plane touched down just before the final hour on Wall Street last Friday. Markets were calm, greeting the summit with a kind of muted exhale. After-hours trading was also uneventful; surely volatility would have kicked up had either man stormed out of the meeting room. Before the encounter, President Trump told reporters would be willing to walk away if no deal was workable.
Crude oil, specifically, traded without much fanfare. Both global Brent oil and domestic WTI have performed poorly this summer, near two-month lows, leading into the showdown in Anchorage.
There has also been significant weakness in European natural gas, a commodity that was intensely volatile in the months immediately after Putin invaded Ukraine. The key Dutch TTF natural gas front-month futures contract touched a 52-week low as Putin stepped onto the red-carpet-covered tarmac.
European Natural Gas: Fresh 52-Week Low Augurs for Reduced Conflict
Source: TradingView
Price action in advance of the meeting was telling on its own. The market appears to be discounting the real chance of a lasting agreement (perhaps not full-on peace) between Russia and Ukraine. If Putin backs down, it’s reasonable to expect a freer flow of oil and natural gas, which would potentially keep a lid on energy costs. On net, we have not seen energy prices this cheap since Trump’s first term, before the onset of war.
The mainstream media continues to neglect what price could be telling us, but we assert it’s a valuable indicator of upcoming geopolitical turns.
The counterargument is that European aerospace and defense stocks still seem to assume never-ending conflict and intercontinental turmoil. The reality is, though, that the financing committed to bolstering the Euro Area’s military fleet is not a ship that can be turned overnight. It’s likely a more enduring trend that the region’s policymakers now finally realize. President Trump has also made it clear that other nations must own up and foot military-spending bills.
European Aerospace & Defense Stocks Keep Soaring
Source: J.P. Morgan Asset Management
The upshot? The gathering in Alaska was just a first step. More meetings appear to be on the horizon to hopefully end the war, while not yielding literal ground to Putin. Make no mistake, Putin is one of the most despicable men in modern history, and he’s proven untrustworthy; a deal for “deal’s sake” won’t suffice. Our team will closely monitor price action for the first clues on how this slice of the geopolitical landscape unfolds.
This is exactly the kind of scenario where a macro-adaptive strategy becomes relevant. Rather than betting on binary outcomes, diversified and dynamically allocated portfolios are better suited to handle geopolitics that unfold in shades of gray.
Flying South from Anchorage to Jackson Hole: Why Powell’s Speech Matters
With Western unity in question, sanctions fatigue setting in, and a possible thaw in US-Russia dialogue, monetary policy may seem less significant. But it all fits together, and how Fed Chair Powell frames his final Jackson Hole address is key.
The Jackson Hole Economic Symposium, hosted by the Kansas City Federal Reserve, has long been the venue for central bankers to convene, parse white papers, and interact with the media. The 2025 edition is especially important, given the backdrop of so-called stagflationary risks facing the US economy.
President Trump’s new, higher reciprocal tariff rates are in effect, though with a hodge-podge of country, sector, and product-specific carveouts (with more to come). Additionally, the July nonfarm payrolls report included downright awful negative revisions to May and June job gains, while the PPI wholesale inflation update for last month was among the hottest relative to expectations in the past decade. CPI, the consumer price barometer, was somewhat tame, though.
This will be Powell’s last Jackson Hole dance, so to speak. His term as Fed chief is set to expire in May of 2026, and candidates are already lining up to succeed the Trump appointee. Jay arrives at this moment with a mixed scorecard. He is credited with helping to steer the economy through the pandemic and early inflation shock.
The Fed was blatantly caught on its back foot regarding the inflation fight, though, keeping its policy rate target far too low for far too long. Powell was “too late,” which was a key factor in the US CPI rate soaring to a 40-year high in June of 2022. Critics now contend he’s late again, but with respect to easing monetary conditions.
The Backdrop: Rates, Inflation, and a Weakening Labor Market
The Fed has a dual mandate: price stability and maximum employment. Both are on shaky footing heading into Jackson Hole. The best way to think about the speech (which begins Friday at 10 a.m. ET) is to parallel it with a typical Fed meeting and policy statement. There are three components: growth, inflation, and guidance. Here’s how those pillars stand today:
Growth and the Jobs Market
The unemployment rate is at a year-to-date high just shy of 4.3%. That’s still a low figure by historical standards, but the pace of monthly job growth has ground to a halt, with the three-month average increase having slowed significantly to just 35,000. It’s estimated that the breakeven pace of job increase needed to keep the unemployment rate steady is closer to 70,000.
The sluggish labor market is evidence of sagging GDP growth. The first half featured an inflation-adjusted expansion pace of less than 1.5%, far below what was seen from 2021 through 2024. Real consumer spending, meanwhile, has been negative, on net, since the start of the year, and the only material tailwind seems to be intense investment from businesses, care of the AI revolution.
FOMC voting member Governor Chris Waller, seen as a leading contender in the race to be the next Fed chair, has been outspoken about the employment situation and its waning health. Before the dismal July jobs report, he was direct in calling for immediate rate cuts. A chorus of Fed watchers, including other candidates aiming to be Powell’s successor, have come out in support of a September cut, too.
US Jobs Growth Stalls
Source: Bloomberg
Inflation and Tariffs
Normally, a sudden slowdown in job growth would prompt the Fed to ease, including lowering interest rates. It’s not so easy this time, however. Inflation remains uncomfortably above the Fed’s 2% target, according to the latest PCE Price Index data (through June). We’ll get the July PCE on the final Friday of August (after Jackson Hole, but before the next Fed decision).
Most of the street expects the number to be close to 0.30%, which, annualized, is much too hot for cuts, all else equal. Moreover, that will be a pre-reciprocal-tariff figure. The fear is that as higher import duties filter through the economy, consumer prices will climb at a faster clip. Goldman Sachs thinks PCE inflation could hold above 3% by year-end; the Kalshi betting market pegs the year-on-year CPI rate to 3.1% by December.
This isn’t the ideal setup for 2025 Jackson Hole.
Recall it was three years ago when Powell delivered a direct, eight-minute missive, warning households and businesses that a period of “pain” was in store to combat inflation.
In 2023, the Fed chair underscored that the central bank operates without clear signals on how to conduct policy. He said, “As is often the case, we are navigating by the stars under cloudy skies.” Those skies appear quite overcast today.
Then, 12 months ago, the sun came out. With inflation cooling and solid job growth, he assured investors that interest rate cutting would commence after a hiking cycle that began in March 2022.
US Average Effective Tariff Rate Spiked in August
Source: Bloomberg
Policy Outlook
That’s all in the past. Powell’s legacy is yet to be fully written, and this week’s speech will play a critical part in how history views the 16th chair of the Federal Reserve. The FOMC would like to bring down its target rate, perhaps a few times, to bring it closer to neutral. The journey from today’s 4.33% level could be a slow one, due to the inflation reality.
Unlike last year, we don’t think Powell will tee up a September cut. So, his message will be a middle ground between “painful Powell” in 2022 and “jolly Jay” of 2024.
Friday’s speech will be his first since the July jobs report that rocked Wall Street. Our team concludes he will be forced to confront the reality of a weakening employment situation (which he had described as solid at the Fed meeting four weeks ago), along with outlining further downside risks to growth.
He will be steadfast in calling out a stubborn inflation backdrop, though. And that’s the reason an aggressive easing cycle cannot be started right away, in his mind. We anticipate FOMC doves to spread their wings in the days after, imploring their hawkish colleagues to consider voting for a cut come September 17. Next month’s Fed gathering also includes the quarterly Summary of Economic Projections (SEP), so that’s even more monetary-policy candy for macro-onlookers.
Bond traders now assume a 90% chance of a September rate cut. (Jay probably takes issue with the market’s aggressive wager.) During the speech, watch out for comments aimed at cooling rate-cut hopes, which could bring about some market volatility, particularly in rate-sensitive niches like US small caps and the homebuilder stocks.
High Odds of a September Fed Rate Cut, Above 90%
Source: CME Fed Watch Tool
What Else? Stagflation, Trump’s Needling, and Fed Independence.
Tepid job growth and 2.6% PCE inflation stir up “stagflation” chatter. Of course, today’s landscape is a far cry from the truly stagflationary environment of the mid to late 1970s, which featured negative GDP growth, extremely high and protracted unemployment, and 5%-plus inflation. Powell will offer a more upbeat tone in that respect.
PCE Inflation Running Near 3%
Source: Goldman Sachs
Elsewhere, President Trump has been busy strategizing policy vis-à-vis Putin, so his verbal attacks on Powell have become less frequent. We don’t expect Jay to address the president’s badgering directly, but he will likely offer a sentence or two on the importance of an independent Federal Reserve.
In general, Powell aims to keep drama in check. Aside from a blurb here or there, he’ll stick with familiar themes to avoid fireworks:
Data Dependence: He will emphasize that policy remains guided by incoming data, not preset rules and guesswork.
Commitment to Price Stability: Powell has demonstrated a penchant for weighing inflation heavily, even with a soft jobs market.
Acknowledgment of Risks: Look for careful language around growth headwinds and labor weakness, signaling that the Fed sees risks on both sides.
Geopolitics and Monetary Policy Intersecting
The world is watching how geopolitics shift in the wake of the Alaska summit. This week’s central bank gathering in Wyoming adds to the drama. Are markets worried? It doesn’t seem like it.
The S&P 500 closed at an all-time weekly high as Trump and Putin traveled to their conference site. The Cboe Volatility Index (VIX) settled at a mere 15, below the Wall Street fear gauge’s long-term average, and the benchmark 10-year Treasury note yield appears pinned to 4.3%. The US Dollar Index, meanwhile, has steadied itself after a first-half drubbing. It’s also possible that, given low oil prices, American consumers could see sub-$3 per gallon prices at the pump this fall.
VIX Very Low, Near 15
Source: TradingView
Part of being an astute macro investor is taking cues from price signals. Are markets wrong sometimes? For sure. Should you trust political talking heads on cable TV more than what price action in stocks, bonds, commodities, and currencies tells you? Absolutely not.
Despite all the fearmongering, including mainstream essays about Trump bowing to Putin and stagflation being the new norm, markets point to optimism. Peace could very well prevail, even though some on the left seem to be rooting against that outcome, while the trope of tariffs crashing the economy and causing a recession is played and overblown.
We’d strike a different tone if stocks were trending lower, oil was going to the moon, and Treasury yields were soaring. It’s just not the reality today. Heck, even European bank stocks are in their best bull market in two decades—not exactly a harbinger of intercontinental war and business hardship.
As always, media chaos makes headlines, we at Allio make strategy. The macro climate may not be completely tranquil today, but macro signals point to optimism. Investors may consider staying focused and making decisions based on their individual financial goals and risk tolerance.
Be a “Forecast” Investor, Not a “Window” Investor
The Bottom Line
Both Anchorage and Jackson Hole are legacy moments. For Putin, the Alaska summit was about seeking an exit ramp for a costly war, while still gunning for more land and power. Trump centered on showing strength through diplomacy and dealmaking. For Powell, Jackson Hole is about cementing his reputation as a steady hand who kept the Fed focused on its mandate despite unprecedented shocks.
As for markets, macro scales are tipped toward sanguine outcomes, not end-of-the-world scenarios that the media pushes.
One strategy investors may consider is dynamic asset allocation, but it's important to understand that all investment strategies carry risk. Allio’s portfolios are managed by hedge-fund experts who focus on the big picture and what truly moves markets, not the noise. Our ALTITUDE AI™ technology is designed to provide a tailored investing experience, but like all investments, it carries risk and there's no guarantee of profit.
From Anchorage to Jackson Hole: Dissecting the Trump-Putin Meeting and What Powell Will Say This Week
Presidents Trump and Putin walked down the runway in Alaska with the world watching, and there are key macro impacts
Fed Chair Powell speaks this Friday morning from tranquil Wyoming amid volatile economic conditions, but calm markets
We offer the key takeaways with so many geopolitical and monetary issues at hand
Macro investors have had a lot to digest just this month. A rocky July jobs report stoked stagflation concerns, last week’s CPI report was encouraging, and Retail Sales were on point. That’s all standard fare. But the geopolitical and macro chessboard may be jolted twice before August comes to a close:
First, by President Trump’s high-stakes summit with Russian President Vladimir Putin in Anchorage, Alaska, and second, by this week’s Jackson Hole Economic Symposium, where Fed Chair Jerome Powell delivers his annual speech from the shadows of the Grand Teton mountains.
It’s an action-packed stretch that is poised to shape how the rest of the year plays out for markets. No corner is bypassed. Stocks, bonds, commodities, and currencies are all in play. Our goal? To map out how these twin macro events fit in with the usual data.
What could a ceasefire between Russia and Ukraine look like for the struggling international Energy sector? Is the story of a burgeoning European defense arsenal, a key growth driver for the continent, in jeopardy? Back home, will Powell signal an interest rate cut in his address? Will he bow to pressure applied by President Trump? What will the candidates vying to be the next Fed chair have to say about it all?
This week bridges geopolitical power wielders with market-moving central bankers. Individual investors are doing some globe-trotting, given the one-two punch of the events in Anchorage and the Fed pow-wow in Jackson Hole. The overlap and its market implications are key to separating signal from noise as we approach 2025’s final stretch. Let’s begin with a trip to the nation’s last frontier.
Anchorage: Symbolism Without Substance...Yet
Last Friday’s Trump-Putin summit at Joint Base Elmendorf-Richardson on home soil was as much theater as diplomacy. The US rolled out the red carpet for the Russian leader, a man responsible for the deaths of millions of his own men and citizens of the many nation-states he has directed his forces to invade.
The scene included military flyovers, carefully choreographed handshakes, and all the pomp and circumstance you’d expect with President Trump playing the part of POTUS and TV director.
Putin & Trump Shake Hands in Alaska
Source: AP, Sky News
This was the first Russian presidential visit to US soil in a decade and the only post-invasion invitation to the West. As Putin stepped into the beast, and the motorcade pulled away, it may have marked a giant geopolitical leap. He and Trump spoke among a small circle of diplomats from both sides for about four hours, followed by a press conference last Friday night, after markets had closed.
The outcome? No ceasefire or peace deal. But the two presidents signaled that more meetings were likely. Toward the end of the media Q&A, Putin turned his head to Trump and asked in English, “Next time in Moscow?” Over the ensuing weekend, Trump confirmed that Ukrainian President Volodymyr Zelensky would visit the White House on August 18.
Putin reportedly offered no real concessions during the talks, though both leaders painted the meeting as productive. Trump, for his part, suggested future direct diplomacy as he prepared to debrief NATO and Zelenskyy.
It remains to be seen if land will be ceded to Putin or what new sanctions could be applied to Russia’s already strained economic system. It’s also possible that restrictions could be loosened if a broad agreement is reached. Trump might also play the waiting game, as some experts claim Putin may simply run out of money to fund the war he started in early 2022.
Trump a Nobel Peace Prize Winner? Odds Remain Low.
Source: Kalshi
How Markets Digested Anchorage
Putin’s plane touched down just before the final hour on Wall Street last Friday. Markets were calm, greeting the summit with a kind of muted exhale. After-hours trading was also uneventful; surely volatility would have kicked up had either man stormed out of the meeting room. Before the encounter, President Trump told reporters would be willing to walk away if no deal was workable.
Crude oil, specifically, traded without much fanfare. Both global Brent oil and domestic WTI have performed poorly this summer, near two-month lows, leading into the showdown in Anchorage.
There has also been significant weakness in European natural gas, a commodity that was intensely volatile in the months immediately after Putin invaded Ukraine. The key Dutch TTF natural gas front-month futures contract touched a 52-week low as Putin stepped onto the red-carpet-covered tarmac.
European Natural Gas: Fresh 52-Week Low Augurs for Reduced Conflict
Source: TradingView
Price action in advance of the meeting was telling on its own. The market appears to be discounting the real chance of a lasting agreement (perhaps not full-on peace) between Russia and Ukraine. If Putin backs down, it’s reasonable to expect a freer flow of oil and natural gas, which would potentially keep a lid on energy costs. On net, we have not seen energy prices this cheap since Trump’s first term, before the onset of war.
The mainstream media continues to neglect what price could be telling us, but we assert it’s a valuable indicator of upcoming geopolitical turns.
The counterargument is that European aerospace and defense stocks still seem to assume never-ending conflict and intercontinental turmoil. The reality is, though, that the financing committed to bolstering the Euro Area’s military fleet is not a ship that can be turned overnight. It’s likely a more enduring trend that the region’s policymakers now finally realize. President Trump has also made it clear that other nations must own up and foot military-spending bills.
European Aerospace & Defense Stocks Keep Soaring
Source: J.P. Morgan Asset Management
The upshot? The gathering in Alaska was just a first step. More meetings appear to be on the horizon to hopefully end the war, while not yielding literal ground to Putin. Make no mistake, Putin is one of the most despicable men in modern history, and he’s proven untrustworthy; a deal for “deal’s sake” won’t suffice. Our team will closely monitor price action for the first clues on how this slice of the geopolitical landscape unfolds.
This is exactly the kind of scenario where a macro-adaptive strategy becomes relevant. Rather than betting on binary outcomes, diversified and dynamically allocated portfolios are better suited to handle geopolitics that unfold in shades of gray.
Flying South from Anchorage to Jackson Hole: Why Powell’s Speech Matters
With Western unity in question, sanctions fatigue setting in, and a possible thaw in US-Russia dialogue, monetary policy may seem less significant. But it all fits together, and how Fed Chair Powell frames his final Jackson Hole address is key.
The Jackson Hole Economic Symposium, hosted by the Kansas City Federal Reserve, has long been the venue for central bankers to convene, parse white papers, and interact with the media. The 2025 edition is especially important, given the backdrop of so-called stagflationary risks facing the US economy.
President Trump’s new, higher reciprocal tariff rates are in effect, though with a hodge-podge of country, sector, and product-specific carveouts (with more to come). Additionally, the July nonfarm payrolls report included downright awful negative revisions to May and June job gains, while the PPI wholesale inflation update for last month was among the hottest relative to expectations in the past decade. CPI, the consumer price barometer, was somewhat tame, though.
This will be Powell’s last Jackson Hole dance, so to speak. His term as Fed chief is set to expire in May of 2026, and candidates are already lining up to succeed the Trump appointee. Jay arrives at this moment with a mixed scorecard. He is credited with helping to steer the economy through the pandemic and early inflation shock.
The Fed was blatantly caught on its back foot regarding the inflation fight, though, keeping its policy rate target far too low for far too long. Powell was “too late,” which was a key factor in the US CPI rate soaring to a 40-year high in June of 2022. Critics now contend he’s late again, but with respect to easing monetary conditions.
The Backdrop: Rates, Inflation, and a Weakening Labor Market
The Fed has a dual mandate: price stability and maximum employment. Both are on shaky footing heading into Jackson Hole. The best way to think about the speech (which begins Friday at 10 a.m. ET) is to parallel it with a typical Fed meeting and policy statement. There are three components: growth, inflation, and guidance. Here’s how those pillars stand today:
Growth and the Jobs Market
The unemployment rate is at a year-to-date high just shy of 4.3%. That’s still a low figure by historical standards, but the pace of monthly job growth has ground to a halt, with the three-month average increase having slowed significantly to just 35,000. It’s estimated that the breakeven pace of job increase needed to keep the unemployment rate steady is closer to 70,000.
The sluggish labor market is evidence of sagging GDP growth. The first half featured an inflation-adjusted expansion pace of less than 1.5%, far below what was seen from 2021 through 2024. Real consumer spending, meanwhile, has been negative, on net, since the start of the year, and the only material tailwind seems to be intense investment from businesses, care of the AI revolution.
FOMC voting member Governor Chris Waller, seen as a leading contender in the race to be the next Fed chair, has been outspoken about the employment situation and its waning health. Before the dismal July jobs report, he was direct in calling for immediate rate cuts. A chorus of Fed watchers, including other candidates aiming to be Powell’s successor, have come out in support of a September cut, too.
US Jobs Growth Stalls
Source: Bloomberg
Inflation and Tariffs
Normally, a sudden slowdown in job growth would prompt the Fed to ease, including lowering interest rates. It’s not so easy this time, however. Inflation remains uncomfortably above the Fed’s 2% target, according to the latest PCE Price Index data (through June). We’ll get the July PCE on the final Friday of August (after Jackson Hole, but before the next Fed decision).
Most of the street expects the number to be close to 0.30%, which, annualized, is much too hot for cuts, all else equal. Moreover, that will be a pre-reciprocal-tariff figure. The fear is that as higher import duties filter through the economy, consumer prices will climb at a faster clip. Goldman Sachs thinks PCE inflation could hold above 3% by year-end; the Kalshi betting market pegs the year-on-year CPI rate to 3.1% by December.
This isn’t the ideal setup for 2025 Jackson Hole.
Recall it was three years ago when Powell delivered a direct, eight-minute missive, warning households and businesses that a period of “pain” was in store to combat inflation.
In 2023, the Fed chair underscored that the central bank operates without clear signals on how to conduct policy. He said, “As is often the case, we are navigating by the stars under cloudy skies.” Those skies appear quite overcast today.
Then, 12 months ago, the sun came out. With inflation cooling and solid job growth, he assured investors that interest rate cutting would commence after a hiking cycle that began in March 2022.
US Average Effective Tariff Rate Spiked in August
Source: Bloomberg
Policy Outlook
That’s all in the past. Powell’s legacy is yet to be fully written, and this week’s speech will play a critical part in how history views the 16th chair of the Federal Reserve. The FOMC would like to bring down its target rate, perhaps a few times, to bring it closer to neutral. The journey from today’s 4.33% level could be a slow one, due to the inflation reality.
Unlike last year, we don’t think Powell will tee up a September cut. So, his message will be a middle ground between “painful Powell” in 2022 and “jolly Jay” of 2024.
Friday’s speech will be his first since the July jobs report that rocked Wall Street. Our team concludes he will be forced to confront the reality of a weakening employment situation (which he had described as solid at the Fed meeting four weeks ago), along with outlining further downside risks to growth.
He will be steadfast in calling out a stubborn inflation backdrop, though. And that’s the reason an aggressive easing cycle cannot be started right away, in his mind. We anticipate FOMC doves to spread their wings in the days after, imploring their hawkish colleagues to consider voting for a cut come September 17. Next month’s Fed gathering also includes the quarterly Summary of Economic Projections (SEP), so that’s even more monetary-policy candy for macro-onlookers.
Bond traders now assume a 90% chance of a September rate cut. (Jay probably takes issue with the market’s aggressive wager.) During the speech, watch out for comments aimed at cooling rate-cut hopes, which could bring about some market volatility, particularly in rate-sensitive niches like US small caps and the homebuilder stocks.
High Odds of a September Fed Rate Cut, Above 90%
Source: CME Fed Watch Tool
What Else? Stagflation, Trump’s Needling, and Fed Independence.
Tepid job growth and 2.6% PCE inflation stir up “stagflation” chatter. Of course, today’s landscape is a far cry from the truly stagflationary environment of the mid to late 1970s, which featured negative GDP growth, extremely high and protracted unemployment, and 5%-plus inflation. Powell will offer a more upbeat tone in that respect.
PCE Inflation Running Near 3%
Source: Goldman Sachs
Elsewhere, President Trump has been busy strategizing policy vis-à-vis Putin, so his verbal attacks on Powell have become less frequent. We don’t expect Jay to address the president’s badgering directly, but he will likely offer a sentence or two on the importance of an independent Federal Reserve.
In general, Powell aims to keep drama in check. Aside from a blurb here or there, he’ll stick with familiar themes to avoid fireworks:
Data Dependence: He will emphasize that policy remains guided by incoming data, not preset rules and guesswork.
Commitment to Price Stability: Powell has demonstrated a penchant for weighing inflation heavily, even with a soft jobs market.
Acknowledgment of Risks: Look for careful language around growth headwinds and labor weakness, signaling that the Fed sees risks on both sides.
Geopolitics and Monetary Policy Intersecting
The world is watching how geopolitics shift in the wake of the Alaska summit. This week’s central bank gathering in Wyoming adds to the drama. Are markets worried? It doesn’t seem like it.
The S&P 500 closed at an all-time weekly high as Trump and Putin traveled to their conference site. The Cboe Volatility Index (VIX) settled at a mere 15, below the Wall Street fear gauge’s long-term average, and the benchmark 10-year Treasury note yield appears pinned to 4.3%. The US Dollar Index, meanwhile, has steadied itself after a first-half drubbing. It’s also possible that, given low oil prices, American consumers could see sub-$3 per gallon prices at the pump this fall.
VIX Very Low, Near 15
Source: TradingView
Part of being an astute macro investor is taking cues from price signals. Are markets wrong sometimes? For sure. Should you trust political talking heads on cable TV more than what price action in stocks, bonds, commodities, and currencies tells you? Absolutely not.
Despite all the fearmongering, including mainstream essays about Trump bowing to Putin and stagflation being the new norm, markets point to optimism. Peace could very well prevail, even though some on the left seem to be rooting against that outcome, while the trope of tariffs crashing the economy and causing a recession is played and overblown.
We’d strike a different tone if stocks were trending lower, oil was going to the moon, and Treasury yields were soaring. It’s just not the reality today. Heck, even European bank stocks are in their best bull market in two decades—not exactly a harbinger of intercontinental war and business hardship.
As always, media chaos makes headlines, we at Allio make strategy. The macro climate may not be completely tranquil today, but macro signals point to optimism. Investors may consider staying focused and making decisions based on their individual financial goals and risk tolerance.
Be a “Forecast” Investor, Not a “Window” Investor
The Bottom Line
Both Anchorage and Jackson Hole are legacy moments. For Putin, the Alaska summit was about seeking an exit ramp for a costly war, while still gunning for more land and power. Trump centered on showing strength through diplomacy and dealmaking. For Powell, Jackson Hole is about cementing his reputation as a steady hand who kept the Fed focused on its mandate despite unprecedented shocks.
As for markets, macro scales are tipped toward sanguine outcomes, not end-of-the-world scenarios that the media pushes.
One strategy investors may consider is dynamic asset allocation, but it's important to understand that all investment strategies carry risk. Allio’s portfolios are managed by hedge-fund experts who focus on the big picture and what truly moves markets, not the noise. Our ALTITUDE AI™ technology is designed to provide a tailored investing experience, but like all investments, it carries risk and there's no guarantee of profit.
From Anchorage to Jackson Hole: Dissecting the Trump-Putin Meeting and What Powell Will Say This Week
Presidents Trump and Putin walked down the runway in Alaska with the world watching, and there are key macro impacts
Fed Chair Powell speaks this Friday morning from tranquil Wyoming amid volatile economic conditions, but calm markets
We offer the key takeaways with so many geopolitical and monetary issues at hand
Macro investors have had a lot to digest just this month. A rocky July jobs report stoked stagflation concerns, last week’s CPI report was encouraging, and Retail Sales were on point. That’s all standard fare. But the geopolitical and macro chessboard may be jolted twice before August comes to a close:
First, by President Trump’s high-stakes summit with Russian President Vladimir Putin in Anchorage, Alaska, and second, by this week’s Jackson Hole Economic Symposium, where Fed Chair Jerome Powell delivers his annual speech from the shadows of the Grand Teton mountains.
It’s an action-packed stretch that is poised to shape how the rest of the year plays out for markets. No corner is bypassed. Stocks, bonds, commodities, and currencies are all in play. Our goal? To map out how these twin macro events fit in with the usual data.
What could a ceasefire between Russia and Ukraine look like for the struggling international Energy sector? Is the story of a burgeoning European defense arsenal, a key growth driver for the continent, in jeopardy? Back home, will Powell signal an interest rate cut in his address? Will he bow to pressure applied by President Trump? What will the candidates vying to be the next Fed chair have to say about it all?
This week bridges geopolitical power wielders with market-moving central bankers. Individual investors are doing some globe-trotting, given the one-two punch of the events in Anchorage and the Fed pow-wow in Jackson Hole. The overlap and its market implications are key to separating signal from noise as we approach 2025’s final stretch. Let’s begin with a trip to the nation’s last frontier.
Anchorage: Symbolism Without Substance...Yet
Last Friday’s Trump-Putin summit at Joint Base Elmendorf-Richardson on home soil was as much theater as diplomacy. The US rolled out the red carpet for the Russian leader, a man responsible for the deaths of millions of his own men and citizens of the many nation-states he has directed his forces to invade.
The scene included military flyovers, carefully choreographed handshakes, and all the pomp and circumstance you’d expect with President Trump playing the part of POTUS and TV director.
Putin & Trump Shake Hands in Alaska
Source: AP, Sky News
This was the first Russian presidential visit to US soil in a decade and the only post-invasion invitation to the West. As Putin stepped into the beast, and the motorcade pulled away, it may have marked a giant geopolitical leap. He and Trump spoke among a small circle of diplomats from both sides for about four hours, followed by a press conference last Friday night, after markets had closed.
The outcome? No ceasefire or peace deal. But the two presidents signaled that more meetings were likely. Toward the end of the media Q&A, Putin turned his head to Trump and asked in English, “Next time in Moscow?” Over the ensuing weekend, Trump confirmed that Ukrainian President Volodymyr Zelensky would visit the White House on August 18.
Putin reportedly offered no real concessions during the talks, though both leaders painted the meeting as productive. Trump, for his part, suggested future direct diplomacy as he prepared to debrief NATO and Zelenskyy.
It remains to be seen if land will be ceded to Putin or what new sanctions could be applied to Russia’s already strained economic system. It’s also possible that restrictions could be loosened if a broad agreement is reached. Trump might also play the waiting game, as some experts claim Putin may simply run out of money to fund the war he started in early 2022.
Trump a Nobel Peace Prize Winner? Odds Remain Low.
Source: Kalshi
How Markets Digested Anchorage
Putin’s plane touched down just before the final hour on Wall Street last Friday. Markets were calm, greeting the summit with a kind of muted exhale. After-hours trading was also uneventful; surely volatility would have kicked up had either man stormed out of the meeting room. Before the encounter, President Trump told reporters would be willing to walk away if no deal was workable.
Crude oil, specifically, traded without much fanfare. Both global Brent oil and domestic WTI have performed poorly this summer, near two-month lows, leading into the showdown in Anchorage.
There has also been significant weakness in European natural gas, a commodity that was intensely volatile in the months immediately after Putin invaded Ukraine. The key Dutch TTF natural gas front-month futures contract touched a 52-week low as Putin stepped onto the red-carpet-covered tarmac.
European Natural Gas: Fresh 52-Week Low Augurs for Reduced Conflict
Source: TradingView
Price action in advance of the meeting was telling on its own. The market appears to be discounting the real chance of a lasting agreement (perhaps not full-on peace) between Russia and Ukraine. If Putin backs down, it’s reasonable to expect a freer flow of oil and natural gas, which would potentially keep a lid on energy costs. On net, we have not seen energy prices this cheap since Trump’s first term, before the onset of war.
The mainstream media continues to neglect what price could be telling us, but we assert it’s a valuable indicator of upcoming geopolitical turns.
The counterargument is that European aerospace and defense stocks still seem to assume never-ending conflict and intercontinental turmoil. The reality is, though, that the financing committed to bolstering the Euro Area’s military fleet is not a ship that can be turned overnight. It’s likely a more enduring trend that the region’s policymakers now finally realize. President Trump has also made it clear that other nations must own up and foot military-spending bills.
European Aerospace & Defense Stocks Keep Soaring
Source: J.P. Morgan Asset Management
The upshot? The gathering in Alaska was just a first step. More meetings appear to be on the horizon to hopefully end the war, while not yielding literal ground to Putin. Make no mistake, Putin is one of the most despicable men in modern history, and he’s proven untrustworthy; a deal for “deal’s sake” won’t suffice. Our team will closely monitor price action for the first clues on how this slice of the geopolitical landscape unfolds.
This is exactly the kind of scenario where a macro-adaptive strategy becomes relevant. Rather than betting on binary outcomes, diversified and dynamically allocated portfolios are better suited to handle geopolitics that unfold in shades of gray.
Flying South from Anchorage to Jackson Hole: Why Powell’s Speech Matters
With Western unity in question, sanctions fatigue setting in, and a possible thaw in US-Russia dialogue, monetary policy may seem less significant. But it all fits together, and how Fed Chair Powell frames his final Jackson Hole address is key.
The Jackson Hole Economic Symposium, hosted by the Kansas City Federal Reserve, has long been the venue for central bankers to convene, parse white papers, and interact with the media. The 2025 edition is especially important, given the backdrop of so-called stagflationary risks facing the US economy.
President Trump’s new, higher reciprocal tariff rates are in effect, though with a hodge-podge of country, sector, and product-specific carveouts (with more to come). Additionally, the July nonfarm payrolls report included downright awful negative revisions to May and June job gains, while the PPI wholesale inflation update for last month was among the hottest relative to expectations in the past decade. CPI, the consumer price barometer, was somewhat tame, though.
This will be Powell’s last Jackson Hole dance, so to speak. His term as Fed chief is set to expire in May of 2026, and candidates are already lining up to succeed the Trump appointee. Jay arrives at this moment with a mixed scorecard. He is credited with helping to steer the economy through the pandemic and early inflation shock.
The Fed was blatantly caught on its back foot regarding the inflation fight, though, keeping its policy rate target far too low for far too long. Powell was “too late,” which was a key factor in the US CPI rate soaring to a 40-year high in June of 2022. Critics now contend he’s late again, but with respect to easing monetary conditions.
The Backdrop: Rates, Inflation, and a Weakening Labor Market
The Fed has a dual mandate: price stability and maximum employment. Both are on shaky footing heading into Jackson Hole. The best way to think about the speech (which begins Friday at 10 a.m. ET) is to parallel it with a typical Fed meeting and policy statement. There are three components: growth, inflation, and guidance. Here’s how those pillars stand today:
Growth and the Jobs Market
The unemployment rate is at a year-to-date high just shy of 4.3%. That’s still a low figure by historical standards, but the pace of monthly job growth has ground to a halt, with the three-month average increase having slowed significantly to just 35,000. It’s estimated that the breakeven pace of job increase needed to keep the unemployment rate steady is closer to 70,000.
The sluggish labor market is evidence of sagging GDP growth. The first half featured an inflation-adjusted expansion pace of less than 1.5%, far below what was seen from 2021 through 2024. Real consumer spending, meanwhile, has been negative, on net, since the start of the year, and the only material tailwind seems to be intense investment from businesses, care of the AI revolution.
FOMC voting member Governor Chris Waller, seen as a leading contender in the race to be the next Fed chair, has been outspoken about the employment situation and its waning health. Before the dismal July jobs report, he was direct in calling for immediate rate cuts. A chorus of Fed watchers, including other candidates aiming to be Powell’s successor, have come out in support of a September cut, too.
US Jobs Growth Stalls
Source: Bloomberg
Inflation and Tariffs
Normally, a sudden slowdown in job growth would prompt the Fed to ease, including lowering interest rates. It’s not so easy this time, however. Inflation remains uncomfortably above the Fed’s 2% target, according to the latest PCE Price Index data (through June). We’ll get the July PCE on the final Friday of August (after Jackson Hole, but before the next Fed decision).
Most of the street expects the number to be close to 0.30%, which, annualized, is much too hot for cuts, all else equal. Moreover, that will be a pre-reciprocal-tariff figure. The fear is that as higher import duties filter through the economy, consumer prices will climb at a faster clip. Goldman Sachs thinks PCE inflation could hold above 3% by year-end; the Kalshi betting market pegs the year-on-year CPI rate to 3.1% by December.
This isn’t the ideal setup for 2025 Jackson Hole.
Recall it was three years ago when Powell delivered a direct, eight-minute missive, warning households and businesses that a period of “pain” was in store to combat inflation.
In 2023, the Fed chair underscored that the central bank operates without clear signals on how to conduct policy. He said, “As is often the case, we are navigating by the stars under cloudy skies.” Those skies appear quite overcast today.
Then, 12 months ago, the sun came out. With inflation cooling and solid job growth, he assured investors that interest rate cutting would commence after a hiking cycle that began in March 2022.
US Average Effective Tariff Rate Spiked in August
Source: Bloomberg
Policy Outlook
That’s all in the past. Powell’s legacy is yet to be fully written, and this week’s speech will play a critical part in how history views the 16th chair of the Federal Reserve. The FOMC would like to bring down its target rate, perhaps a few times, to bring it closer to neutral. The journey from today’s 4.33% level could be a slow one, due to the inflation reality.
Unlike last year, we don’t think Powell will tee up a September cut. So, his message will be a middle ground between “painful Powell” in 2022 and “jolly Jay” of 2024.
Friday’s speech will be his first since the July jobs report that rocked Wall Street. Our team concludes he will be forced to confront the reality of a weakening employment situation (which he had described as solid at the Fed meeting four weeks ago), along with outlining further downside risks to growth.
He will be steadfast in calling out a stubborn inflation backdrop, though. And that’s the reason an aggressive easing cycle cannot be started right away, in his mind. We anticipate FOMC doves to spread their wings in the days after, imploring their hawkish colleagues to consider voting for a cut come September 17. Next month’s Fed gathering also includes the quarterly Summary of Economic Projections (SEP), so that’s even more monetary-policy candy for macro-onlookers.
Bond traders now assume a 90% chance of a September rate cut. (Jay probably takes issue with the market’s aggressive wager.) During the speech, watch out for comments aimed at cooling rate-cut hopes, which could bring about some market volatility, particularly in rate-sensitive niches like US small caps and the homebuilder stocks.
High Odds of a September Fed Rate Cut, Above 90%
Source: CME Fed Watch Tool
What Else? Stagflation, Trump’s Needling, and Fed Independence.
Tepid job growth and 2.6% PCE inflation stir up “stagflation” chatter. Of course, today’s landscape is a far cry from the truly stagflationary environment of the mid to late 1970s, which featured negative GDP growth, extremely high and protracted unemployment, and 5%-plus inflation. Powell will offer a more upbeat tone in that respect.
PCE Inflation Running Near 3%
Source: Goldman Sachs
Elsewhere, President Trump has been busy strategizing policy vis-à-vis Putin, so his verbal attacks on Powell have become less frequent. We don’t expect Jay to address the president’s badgering directly, but he will likely offer a sentence or two on the importance of an independent Federal Reserve.
In general, Powell aims to keep drama in check. Aside from a blurb here or there, he’ll stick with familiar themes to avoid fireworks:
Data Dependence: He will emphasize that policy remains guided by incoming data, not preset rules and guesswork.
Commitment to Price Stability: Powell has demonstrated a penchant for weighing inflation heavily, even with a soft jobs market.
Acknowledgment of Risks: Look for careful language around growth headwinds and labor weakness, signaling that the Fed sees risks on both sides.
Geopolitics and Monetary Policy Intersecting
The world is watching how geopolitics shift in the wake of the Alaska summit. This week’s central bank gathering in Wyoming adds to the drama. Are markets worried? It doesn’t seem like it.
The S&P 500 closed at an all-time weekly high as Trump and Putin traveled to their conference site. The Cboe Volatility Index (VIX) settled at a mere 15, below the Wall Street fear gauge’s long-term average, and the benchmark 10-year Treasury note yield appears pinned to 4.3%. The US Dollar Index, meanwhile, has steadied itself after a first-half drubbing. It’s also possible that, given low oil prices, American consumers could see sub-$3 per gallon prices at the pump this fall.
VIX Very Low, Near 15
Source: TradingView
Part of being an astute macro investor is taking cues from price signals. Are markets wrong sometimes? For sure. Should you trust political talking heads on cable TV more than what price action in stocks, bonds, commodities, and currencies tells you? Absolutely not.
Despite all the fearmongering, including mainstream essays about Trump bowing to Putin and stagflation being the new norm, markets point to optimism. Peace could very well prevail, even though some on the left seem to be rooting against that outcome, while the trope of tariffs crashing the economy and causing a recession is played and overblown.
We’d strike a different tone if stocks were trending lower, oil was going to the moon, and Treasury yields were soaring. It’s just not the reality today. Heck, even European bank stocks are in their best bull market in two decades—not exactly a harbinger of intercontinental war and business hardship.
As always, media chaos makes headlines, we at Allio make strategy. The macro climate may not be completely tranquil today, but macro signals point to optimism. Investors may consider staying focused and making decisions based on their individual financial goals and risk tolerance.
Be a “Forecast” Investor, Not a “Window” Investor
The Bottom Line
Both Anchorage and Jackson Hole are legacy moments. For Putin, the Alaska summit was about seeking an exit ramp for a costly war, while still gunning for more land and power. Trump centered on showing strength through diplomacy and dealmaking. For Powell, Jackson Hole is about cementing his reputation as a steady hand who kept the Fed focused on its mandate despite unprecedented shocks.
As for markets, macro scales are tipped toward sanguine outcomes, not end-of-the-world scenarios that the media pushes.
One strategy investors may consider is dynamic asset allocation, but it's important to understand that all investment strategies carry risk. Allio’s portfolios are managed by hedge-fund experts who focus on the big picture and what truly moves markets, not the noise. Our ALTITUDE AI™ technology is designed to provide a tailored investing experience, but like all investments, it carries risk and there's no guarantee of profit.
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