05:24 AM EDT, 08/20/2024 (MT Newswires) -- Federal Reserve Chair Jerome Powell will remain "noncommittal" this week on the size of the interest-rate cut anticipated in September, according to a research note from D.A. Davidson.

Powell will deliver his remarks on Friday at the Jackson Hole Symposium, Aug. 22-24, where the theme is "Reassessing the Effectiveness and Transition of Monetary Policy."

According to the CME Group's FedWatch Tool, the probability of a drastic 50 basis point interest-rate cut at the Federal Reserve's monetary policy meeting on Sept. 18 was more than 24% as of Tuesday morning, down from 53% a week ago. The likelihood of a more moderate 25 basis-point reduction was over 75%, up from 47% a week ago.

"While investors debate the expected size of the first Fed rate cut, either 0.25% or 0.5% (we are in the 0.25% camp), we expect Mr. Powell to remain noncommittal on that issue, connecting rate decisions to ongoing economic data, but repeating that, over time, the Fed sees lower fed funds rates to a "neutral" level," James Ragan, director of wealth management research, said in the note.

The conference's theme will allow Powell and the Fed to explore how the US economy, despite 525 basis points of hikes from March 2022 to July 2023, continued to grow above trend. It has avoided recession thus far and exceeded the market's "soft landing" expectations.

Ragan said in the note the US economy in 2024 versus past cycles relies more on services and software and less on manufacturing and other capital-intensive investments, perhaps limiting the restrictive impact of higher interest rates.

Many of the largest US companies hold more cash than debt and can self-fund growth and expansion, Ragan said in the note. Further, high government spending boosted business conditions.

For consumers, many homeowners refinanced mortgages at much lower fixed interest rates, locking in relatively low monthly payments and easing constraints on monthly budgets, Ragan added.

The Fed monetary policy meeting will likely be on Sept. 18.