Mr. Powell is likely to say something like "we've done a lot with monetary policy, but there's a lot more to do and our mission is not yet accomplished," Mr. McIntyre said in an interview, given that inflation still remains well above the Fed's mandated target of 2%, while the economy is humming along.
The annualized consumer price index has been dropping steadily since reaching a recent peak of 9.1% in June 2022, clocking in at 3.2% in the most recent reading for July 2023.
Cheryl Smith, Boston-based economist and portfolio manager at Trillium Asset Management, said she expects Mr. Powell to maintain a "moderately hawkish" tone on Friday.
"With some indications that inflation is calming, the Fed will want to see further progress before declaring victory," she said by email. "The current strong state of the job market and strong consumer spending reduce the apparent pain from keeping rates high for now."
Trillium has $5.4 billion in AUM.
Noting that Mr. Powell does not want to rattle the markets in any way, Mr. McIntyre thinks the Fed boss will be careful not to suggest any rate cuts are imminent. "In his speech last year at Jackson Hole, Powell talked about the 'pain' the economy would likely feel amid rate hikes," he said. "Well, we still haven't really felt that 'pain' yet as the equity markets have rallied this year. However, the lag effect is important to consider — this aggressive rate tightening campaign will eventually spill over into the real economy sometime next year."
And that, Mr. McIntyre noted, means the economy will likely slow down accompanied by some job losses in the economy.
Brandywine had $54 billion in assets under management as of June 30.
Matt Lloyd, Monument, Colo.-based chief investment strategist at Advisors Asset Management, said one can't rule out the possibility of more rate hikes as wages look to move slightly higher.
"It appears to us that a potential of a 6% fed funds rate and the corresponding market recalibrations cannot be disregarded and should force more volatility in debt and equity markets," he said by email.
The fed funds rate is currently at a range of between 5.25% and 5.5%.
Monument has $3.8 billion in AUM.
Ms. Smith of Trillium thinks the Fed is "near the end but not at the end" of its tightening program. "We still expect at least one more hike in the federal funds rate," she said. "Stronger economic activity and stronger employment create the conditions for higher rates for longer."
Indeed, recent rhetoric by some Fed officials also suggest rate hikes may continue.
On Aug. 5, at a speech delivered at the 2023 CEO and Senior Management Summit and Annual Meeting in Colorado, Springs, Colo., Fed Gov. Michelle W. Bowman, warned that "additional rate increases will likely be needed to get inflation on a path down to the FOMC's 2% target."
"The recent lower inflation reading was positive, but I will be looking for consistent evidence that inflation is on a meaningful path down toward our 2% goal as I consider further rate increases and how long the federal funds rate will need to remain at a restrictive level," she added.
Markets will be happy, Ms. Smith noted, if Mr. Powell assures a "steadiness in monetary policy ... a message that the Fed is at the helm, and is looking at the data, and will not be making any sudden moves."
"A very near-term cut in rates would be very disconcerting, as it would indicate that the Fed is seeing much worse data that is currently out in the public realm," she added.
