Federal Reserve Chair, Jerome Powell, is set to give his annual policy speech at the Kansas City Fed symposium in Jackson Hole, Wyoming. Investors are eager to hear Powell's views on the neutral real rate of interest (r-star) and its implications for monetary policy. However, it turns out that Powell has already provided some insight into where he stands on this issue.

A look back at Powell's early Jackson Hole speeches reveals that he has paid homage to former Fed Chair Alan Greenspan and his approach to monetary policy during the "new economy" period of the 1990s. Greenspan held interest rates lower than conventional wisdom dictated, leading to a "soft landing" and prolonged economic expansion. This suggests that Powell may be open to the idea of keeping rates below the neutral level to stimulate economic growth and job creation.

While the median estimate among members of the rate-setting committee is still around 0.5% for the neutral rate, some economists believe that r-star may be rising in the US. If this is true, it would have significant implications for the Fed's policy rates and longer-term Treasury yields.

As Powell takes the stage in Jackson Hole, market participants will be closely watching for any further clues about his stance on the neutral rate. Will he continue to align himself with Greenspan's approach, or will he signal a shift in policy? The answer could have a major impact on the trajectory of interest rates and the overall direction of the economy.