Fed Policy and Rate Cut Odds: Jackson Hole Preview

Markets are betting on a September pause after soft CPI/PPI data, with rate-hike odds dropping to 25%. Kevin Warsh's first speech as chair at Jackson Hole is a key catalyst. September rate-cut probability ~40%, but long-term yields elevated due to AI capex and demographics. Consumer weakness (sentiment 51.0, retail sales miss -0.6%) and bond market divergence add complexity. Fed minutes with three dissents for higher rates reinforce rate-hike risk. Retail earnings from Home Depot, Walmart, Target, Lowe's next week are a critical consumer health check.