Fed Chair Jerome Powell is giving a speech this week, and traders will be listening closely for any hints of further interest-rate cuts

Carlos Barria/Reuters

• Jerome Powell is set to give a speech at the annual gathering of central bankers in Jackson Hole, Wyoming this week.
• Traders will be listening closely for any hints that the the Federal Reserve Chair is considering another rate cut this year.
• The Fed recently cut interest rates for the first time in a decade in a bid to counter slowing global growth and reassure investors shaken by the US-China trade war and other issues.

Jerome Powell is set to give a speech at the annual gathering of central bankers in Jackson Hole, Wyoming this week. Traders will be listening closely for any hints that the Federal Reserve Chair is considering another cut to interest rates, after trimming them for the first time in a decade last month.

"Jackson Hole comes at a key moment for the world economy and global central banks," Neil Wilson, chief market analyst for Markets.com, said in a morning note. He added that investors will be looking for clues about what the bankers are thinking.

Another rate cut could act as a stimulus for a slowing global economy, especially after a bout of weak economic data. Germany's economy contracted in the second quarter, while China's industrial output appears to be slowing. It could also shore up market sentiment, which has been knocked by the year-long trade war between the US and China, the world's two largest economies.

Despite the headwinds, the US economy continues to show signs of strength. It added 164,000 jobs in July and retail sales climbed 0.7% too, their biggest rise in four months.

"The data reinforces our view that the US economy should avoid a recession in 2020." Mark Haefele, chief investing officer at UBS Global Wealth Management, said in an email. "Assuming no further escalation in the trade dispute, we assign just a 25% chance that the US economy will contract for two consecutive quarters next year."

"But despite the strength of the consumer side of the US economy, we do expect falling business activity to pull US growth below trend, forcing the Fed to cut rates more than we had previously expected," he added.

President Donald Trump wasn't satisfied with the Fed's recent cut, and continues to pressure the central bank to be more aggressive.

"As usual Powell let us down, but at least he is ending quantitative tightening, which shouldn't have started in the first place - no inflation," he tweeted. "We are winning anyway, but I am certainly not getting any help from the Federal Reserve!"

The Jackson Hole conference is a closely watched event, as attendees have previously outlined policy changes or tackled topical issues in interviews, according to The Financial Times.