Daniel Varela’s intervention in La Tribune de Genève: US employment under pressure

Why Jackson Hole makes markets tremble

Every summer, central bankers from around the world gather in Jackson Hole, Wyoming. This annual meeting, organised by the US Federal Reserve (Fed), has become a must-attend event for financial markets. Announcements made there – or sometimes merely hinted at – can have a lasting impact on the global economy.

A tense context

This year’s edition takes place in a particularly uncertain environment:

• trade tensions initiated by the Trump administration,
• a slowdown in global growth,
• rising US debt levels,
• geopolitical instability in Eastern Europe.

Added to this is a challenge to the Fed’s independence, with Donald Trump publicly voicing his wish to replace its Chairman, Jerome Powell.

US employment under scrutiny

For investors, employment statistics are a crucial signal. Yet the figures reveal a weakening of the US labour market.

“Investors have realised that employment is slowing more sharply than expected across the Atlantic, with companies uncertain how to respond to Trump and his tariffs,” notes Daniel Varela, Chief Investment Officer at Piguet Galland.

In this climate, many businesses are postponing investment projects and slowing recruitment.

The role of interest rates

In the face of this slowdown, the Fed may be tempted to lower its policy rates. Lower rates reduce the cost of credit, thereby supporting household consumption and corporate investment. But the key question remains: how far can the Fed go in supporting the economy without undermining its credibility and independence?

Read the full article in the Tribune de Genève (french only)

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