Jackson Hole Symposium: How and when to watch; why US Fed chair Powells speech is eyed by markets, economists Economy News

If you’re one to closely follow US Fed meetings involving Chairman Jerome Powell, the Jackson Hole Fed meeting might be one event you want to keep an eye on. Colloquially referred to as the Jackson Hole Fed Meeting, the Economic Symposium discusses everything from economic issues to potential policy shifts. Over the years, the symposium has gained significant stature due to its influential speeches and the historical propensity for policy changes to be signalled. For new investors and traders, understanding the implications of this meeting is crucial to navigating market trends and making informed investment decisions. In this article, we delve into the significance and history of the Jackson Hole Fed Meeting and why it can potentially shake up markets globally.

After causing a massive sell-off at the last Jackson Hole Fed meeting, eagle-eyed investors and traders may be looking out for the tone and language that Jerome Powell is using when it comes to tackling rising inflation. Topics that were discussed included structural changes in the financial markets and the conduct of monetary policy and structural constraints on growth. In the wake of the global financial crisis, central banks worldwide used a variety of tactics to resuscitate their countries’ economies. The Jackson Hole Economic Symposium is one of the longest-standing central banking conferences in the world. Attendees are selected based on each year’s topic, with additional consideration given to create regional diversity among attendees. Beyond these traditional sources of policy uncertainty, the supply and demand dislocations unique to this cycle raise further complications through their effects on inflation and labor market dynamics.

The event has also become a globally significant affair, with central bank governors and heads traveling from as far as Japan to spend time at the Jackson Lake Lodge. Powell’s remarks along with media coverage of papers and speeches coming from the event will act as a good barometer of the state of the US economy as well as the world. This is especially helpful now when market volatility has been high, flip-flopping almost daily https://g-markets.net/ between a glass half-full, half-empty analysis. The Jackson Hole Economic Policy Symposium is one of the longest-running economic forums and has a history of signaling policy shifts, developing new economic ideas, and bringing together experts from around the world. Every year, the Federal Reserve Bank of Kansas selects a specific relevant topic for the event and chooses a pool of attendees based on that chosen topic.

The Kansas City Fed posts the papers online, along with full transcripts from the event for anyone to read. Today I will review our progress so far and discuss the outlook and the uncertainties we face as we pursue our dual mandate goals. Given how far we have come, at upcoming meetings we are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks.

Investors are in particular hoping for more clues on the magnitude of the Federal Reserve’s next rate hike at its upcoming policy meeting in September. Traders largely predict a third consecutive increase of 75-basis-points, following similar increases in both June and July, rather than a smaller 50-basis-point hike, according to CME Group data. Without August consumer price data in hand, however, Powell is unlikely to signal any “strong preference for policy action at the September meeting,” Nomura analysts predict. “Powell may more clearly acknowledge the potential for ‘some pain’ as a result of the Fed’s efforts to restore price stability,” the firm warns, also highlighting “rising recession risk” going into next year.

  1. This event is completely separate from the Fed’s eight, pre-scheduled policy-setting meetings where the Federal Open Market Committee (FOMC) votes to change interest rate or balance sheet policies in response to economic conditions.
  2. Total hours worked has been flat over the past six months, and the average workweek has declined to the lower end of its pre-pandemic range, reflecting a gradual normalization in labor market conditions (figure 5).
  3. It raises the question of how they would filter that into setting monetary policy if the bond market begins doing the Fed’s work for it.
  4. But Fed chairs, aware of the heightened attention, have used speeches at the Jackson Hole meeting to provide an update on economic conditions and signal policy shifts ahead.
  5. The Jackson Hole Economic Policy Symposium is an annual symposium held in Jackson Hole, Wyoming, sponsored by the Federal Reserve Bank of Kansas City.

In 1982, they thought a high-profile attendee could get the conference more attention. Federal Reserve Chair Jerome Powell will speak next Friday at the Kansas City Fed’s Jackson Hole Economic Policy Symposium, the US central bank said. Despite the excitement around Jackson Hole, the conference is historically “unremarkable as an equity market catalyst” and is unlikely to change market expectations about more rate hikes later this year, according to Bespoke Investment Group. Markets globally are keeping a close watch on US Federal Reserve Chairman Jerome Powell’s remarks during the upcoming Jackson Hole Economic Policy Symposium 2022. The Federal Reserve Bank of Kansas City will convene the annual event in Wyoming during August.

From understanding what unfolded at past Jackson Hole Economic Symposiums to exploring possible effects on financial markets post-meeting, we hope our guide to Jackson Hole Fed meetings has proved handy. As financial markets continue to navigate uncertain terrains, the Jackson Hole Fed meeting’s impact remains relevant, making it a crucial date on the economic calendar. While there’s no guarantee that the Jackson Hole meeting will lead to any significant changes, the meeting offers a unique opportunity for global economic experts to exchange ideas, analyse existing trends and provide insights into the economic outlook. Therefore, understanding what happens at this event and how it impacts market trends is crucial for traders and investors. This event is completely separate from the Fed’s eight, pre-scheduled policy-setting meetings where the Federal Open Market Committee (FOMC) votes to change interest rate or balance sheet policies in response to economic conditions. But, due to the heightened attention of the event, Fed chairs have used speeches at Jackson Hole to provide an update on economic conditions and signal impending policy shifts.

Additional Fed officials traditionally engage in media interviews during the symposium, offering perspectives on the trajectory of monetary policy. Investors were cautiously optimistic ahead of Fed chair Jerome Powell’s speech at the Jackson Hole symposium on Friday, with stocks rising slightly on Thursday as anticipation builds for any new clues on the direction of future monetary policy. Wall Street will closely watch the event, searching for clues about where the Fed might head next in its attempts to tame rising prices. “It’s interesting how this August speech of the Fed chair at Jackson Hole has become such an important platform for the Fed to influence market expectations about policy. It becomes a self-fulfilling prophecy,” David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution, was quoted saying in a CNN Business report. According to experts, Powell, with his address, is expected to correct market expectations from the last Fed meeting in July.

Beginning in 1982, the Symposium was hosted at the Jackson Lake Lodge at Grand Teton National Park, which is located in Wyoming – one of the seven states served by the Tenth Federal Reserve District. Each year, the event provides a venue for international central bankers, Federal Reserve officials, other policymakers and academics to discuss issues of mutual concern. The most hotly anticipated event is a speech by the Fed chair that typically takes place on Friday morning and is often used as a chance for the central bank to send a signal about policy. Jerome H. Powell, the current Fed head, has made headlines with each and every one of his Jackson Hole speeches, which has investors waiting anxiously for this year’s. It is the only part of the closed-door conference that is broadcast to the public.

Mint Explainer: What is Jackson Hole conference and why does it matter?

At the 2023 Jackson Hole Fed meeting, we can expect a more detailed outlook from Chairman Powell regarding how the US economy should approach steeper interest rates and tighter monetary policy. Some believe Powell will use the opportunity to double down on the central bank’s recent hawkish positioning with the Fed raising interest rates by 75 basis points in its last two monthly meetings. On the other hand, some think he could use the event to clarify the Fed’s position as Wall Street suffers from recent volatility after the rally born from better-than-expected inflation readings in July.

Media

While the Fed will likely not speak directly on what to expect at its next meeting in September, speeches tend to be a good barometer for the Fed’s overall plans. The question of how much further to raise rates to keep reigning in prices without tipping the economy into a recession will be on the minds of all participants and spectators. Markets tend to be very sensitive to the communication coming out of Jackson Hole every August. For example, in 1997, then-Fed Chair Alan Greenspan made a brief comment on Mexico while discussing the Asian financial crisis which caused the Mexican stock market to tumble on fears the Fed chair was signaling a spillover in the global financial system. The Fed had to clarify he was referring to the Mexican peso crisis of 1994 in order to correct the markets.

Inflation: Progress and the Path Ahead

Slowly, the conference attracted the biggest names in the world in policymaking and academics. A conference of less than 150 people in a mountain resort far away from Wall Street and Washington DC hosted by a regional federal bank has become over its 45 years of history the most prestigious economic event. Historically, island candlestick pattern it has been treated as a mini-FOMC meeting by the market, offering a platform for the Fed to provide advanced monetary policy guidance ahead of the subsequent September meeting. Economists and central bankers are preparing to gather at the Federal Reserve‘s scenic retreat in Jackson Hole, Wyoming.

The final category, nonhousing services, accounts for over half of the core PCE index and includes a broad range of services, such as health care, food services, transportation, and accommodations. Inflation measured over the past three and six months has declined, however, which is encouraging. Part of the reason for the modest decline of nonhousing services inflation so far is that many of these services were less affected by global supply chain bottlenecks and are generally thought to be less interest sensitive than other sectors such as housing or durable goods.

Dharmakirti Joshi & Adhish Verma explain what can fuel India’s already-high food inflation. However, investors as well as businesses look forward to what Fed chairman Jerome Powell has to say. Reuters has reported investors expect Powell to deliver an aggressive tightening message and dash hopes for a rate cut next year. The theme will explore the emergence of economic constraints during the pandemic and how supply considerations have returned to center stage.

Jeanna Smialek is in Jackson, Wyo., for the Federal Reserve Bank of Kansas City’s annual gathering. It is not intended to be investment advice and should not be relied on to form the basis of an investment decision. All speeches, panels, and publications will be posted to the Kansas City Fed’s website here. The full history of the Jackson Hole Economic Policy Symposium is detailed in the book In Late August, which is available for free to download here. The 2022 Jackson Hole Economic Symposium will be the first in-person gathering of the event since 2019 and marks 45 years of the event. Running from August 25-27, the event will kick off with a speech by Fed Chair Jerome Powell.

Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy. And bond traders have been telling me if real yields were to get above that 2% level, that could be problematic for the Fed. It raises the question of how they would filter that into setting monetary policy if the bond market begins doing the Fed’s work for it. Since then of, course, a couple more inflation reports have showed more cooling.

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