Good morning, Traders,Modest Dovish Fed RepricingYesterday, it was reported that US jobless claims increased by 11,000 to 235,000 for the week ending 16 August, with continuing claims also rising by 30,000 to 1.972 million (week ending 9 August). This emphasizes the softer jobs market, particularly following the disappointing July payrolls report which indicated that the economy added 35,000 new jobs over a three-month average.Despite this, we also had a hotter-than-expected US manufacturing and services S&P Global PMI release (Purchasing Managers’ Indexes) yesterday, which triggered a moderate dovish rate repricing. Investors are now assigning a 70% (down from circa 80%-85%) chance that the US Federal Reserve (Fed) will reduce its target rate next month.Fed Chair Powell In The SpotlightLet’s be frank, it has largely been all about one man this week: Fed Chairman Jerome Powell.Scheduled to speak at 2:00 pm GMT, the question for many heading into the Fed Chief’s speech today at Jackson Hole is whether or not he backs policy easing. I have read several opinions, and I personally do not think he will be as explicit or as dovish as some are expecting. Another question, then, is if he is not dovish, does that mean he is hawkish?If I am proved correct, and Powell is tight-lipped, it could underpin a bid in the US dollar (USD) and Treasury yields as investors reassess Fed rate pricing. I do, however, think he will direct some of his speech to the recent weakness in the labour market, which could be enough to suggest that the Fed is likely to cut. Still, it is also important to note that, before the September meeting, we have another CPI inflation report (Consumer Price Index) and jobs print.Powell’s speech comes at a time when the jobs market took a hit in July, as I briefly highlighted above. There were some very chunky revisions for May and June, with employment having been revised down by a total of 258,000 jobs!Nevertheless, as I am sure you have seen, the latest US GDP (Gross Domestic Product) report for Q2 25 (advance estimate) showed economic activity running at an annualised rate of 3.0% and consumer inflation (CPI) was largely in line with forecasts. July YY headline inflation remained steady at 2.7%, albeit slightly undershooting the 2.8% median estimate.Yet, core inflation – which strips out volatile components, such as food and energy prices – rose by 3.1%, bettering the 3.0% forecast and the 2.9% reading in June.It was a different story for July wholesale PPI inflation (Producer Price Index); both headline and core YY measures were considerably above expectations, having increased by 3.3% (from 2.4%) and 3.7% (from 2.6%).Fed Officials On The SidelinesAhead of Powell’s speech, Fed officials are uncertain. Kansas City Fed President Jefferey Schmid emphasised the necessity for conclusive data before lowering rates. A similar vibe was shared by Cleveland Fed President Beth Hammack, who conveyed openness to easing policy, but stressed the need for data to justify the move.Atlanta Fed President Raphael Bostic believes a rate cut is on the table, but emphasised uncertainty in terms of a timeline. At the same time, Chicago Fed President Austan Goolsbee raised concerns about recent service sector price pressures that could complicate easing decisions.So, essentially, no one is explicitly pencilling in a September cut. Maybe they are all waiting for the Fed Chief to signal it? Time will tell.Market SnapshotUS equity indices extended losses across the board yesterday, with 9 out of the 11 sectors finishing the session underwater. The S&P 500 shed 25 points (0.4%) to 6,370, the Nasdaq 100 was down 106 points (0.5%) to 23,142, and the Dow Jones dropped 152 points (0.3%) to 44,785. As of writing, US equity index futures are moderately lower, with European equity cash markets opening slightly lower.Across the FX space, the USD Index is up 0.2% this morning, with the euro (EUR) and the British pound (GBP) both catching a bid, while safe havens are on the back foot. Meanwhile, US Treasury yields bear flattened.The commodities complex shows Spot Gold (XAU/USD) and Spot Silver (XAG/USD) are lower this morning, down 0.3%, respectively, with the former extending yesterday’s losses and the latter trimming recent gains. Elsewhere, WTI Oil (West Texas Intermediate) continues to explore higher terrain, up 0.3% this morning, following two consecutive days of upside.Happy trading!