Powell has spoken at Jackson Hole for six straight years. Here is how the market reacted

Fed Chair Powell’s annual remarks at Jackson Hole have become must-watch events for traders, often leading to big market moves. Goldman Sachs provides a quick recap of the past six years and how they have impacted the front end of the bond market (the dollar generally follows the front end of yields).

Key points:

• Powell’s tone has shifted from dovish to hawkish and back again.
• Market reactions vary, but moves of 2 to 4 basis points are common.
• Recent years have seen more extreme surprises.

Markets are pricing in something dovish on Friday at 10 a.m. ET. Fed funds futures are pricing in a 71% chance of 25 basis points in September and a 29% chance of 50 basis points. The market is pricing in 97 basis points of easing in the remaining three meetings this year and 195 basis points next year.

It’s a good summary and a reminder that last year’s speech was a strong hint that the rate hike cycle was over.