Powell is set to give a key speech, and market rate cut expectations may be challenged.

[Golden Finance] Fed Chairman Powell will deliver a key speech at this annual gathering in Wyoming this Friday evening, Beijing time. Meanwhile, the latest inflation data, which came in higher than expected, has led some traders to lower their expectations for interest rate cuts while still maintaining their judgment for a rate cut next month.

Ian Lyngen, the head of U.S. rate strategy at BMO Capital Markets, stated in a research report that as the market prepares for Powell's speech in Jackson Hole, the biggest risk facing U.S. Treasuries is that the Fed Chair may douse the market's widespread expectation of a rate cut in September.

Currently, there are approximately 325,000 option positions (costing about $10 million) that could profit up to $100 million if the Fed cuts interest rates by 50 basis points at the policy meeting in September. Additionally, current market pricing indicates that the probability of a 25 basis point rate cut at the meeting on September 16-17 is about 80%.