When the Federal Reserve Chair Jerome Powell speaks this week at the Jackson Hole Economic Symposium, traders and investors will get another chance to figure out whether the nation's central bank is hawkish or dovish in fighting inflation.

Over the years, Wall Street has been paying close attention to the high-profile bankers' symposium, as the stakes are high. It's where Fed officials deliver critical policy messages to the markets, with traders and investors placing their bets ahead of the event as to what that message would be.

This year isn't an exception to this tradition. Market participants have been trying to guess whether the Fed will deliver a hawkish or a dovish message to bring soaring inflation under control.

A couple of weeks ago, the consensus seemed to be that the Fed would deliver a dovish message, following a couple of inflation numbers that suggested that the old villain of the economy is already under control.

However, that changed at the end of last week and the beginning of this week, with market participants talking of a hawkish Fed message. Thus, the rising volatility was seen on Wall Street in the last couple of trading sessions.

"While economic growth remained weak over the summer, capital markets have rallied after responding favorably to the 2022-version of the Fed pivot," Deron McCoy, chief investment officer at SEIA, told International Business Times in an email. "While historically markets have responded to a stimulative Fed who is cutting interest rates ... this year's rally merely included the belief of a less aggressive Fed with a more gradual glide path of future rate hikes."

So, what's the most likely scenario about the message coming out of the Jackson Holesymposium, hawkish or dovish?

McCoy tried to solve the riddle by appealing to game theory. He sees the Fed paying out two scenarios. One, it becomes dovish, and the consumer price index softens. They win and gain credibility, but if the CPI remains elevated, they lose credibility. And, two, the Fed goes hawkish, a win-win scenario. If the CPI softens, they win as the early monetary tightening now bears the right result. And if the CPI remains elevated, they win by justifying their hawkish stance.

"So viewing the Fed through a 'Game Theory' type of lens, the institution will remain hawkish and equity markets might not exactly be positioned correctly especially considering the latest 17%, two-month rally," McCoy said.

Steve Skancke, a chief economic advisor at Keel Point Wealth Management, is in the dovish camp.

"Minutes from the Fed's July FOMC meeting released last week reflect a cautious tone that higher rates may be having a negative impact on economic growth, hence a likely slowing of the pace of rate increases," he said.

Inflation