Jerome Powell will have an important speech this week.

Fed Chairman Jerome Powell is facing a prisoner's dilemma ahead of his speech at Jackson Hole on Friday. Citi's Director and Global Economist Robert Sockin told Bloomberg Surveillance that the impact of higher tariffs on inflation is causing concern for Powell, and recent labor market data has raised the possibility of interest rate cuts in September. Sockin noted that Powell is unlikely to clearly define a direction in his speech, stating: "Powell is currently under political pressure. There is a lot of data that will be released before the September meeting. Therefore, it is difficult for him to lean entirely in one direction in his speech." This economist stated that the Fed will prioritize growth in the upcoming period despite rising inflation. Sockin said: "We expect core inflation to reach 3% by the end of the year. Although this level is above the target, the Fed may implement a few rate cuts to support growth in the face of recession risks." Sockin emphasizes the decline of the labor market and the supply-demand imbalance, predicting that Powell will highlight this issue in his speech. However, he declared that the Fed will not be overly concerned if inflation fluctuates around 2.25%-2.5%. According to Sockin, Powell's speech at Jackson Hole will "be more cautious in assessing economic prospects than surprising." The possibility of interest rate cuts will largely depend on inflation trends and the impact of trade policies in the coming months.