This week, the Kansas City Fed will host some of the world’s biggest and brightest economists and central bankers at what’s commonly referred to as the Fed Jackson Hole symposium. This annual summit in Wyoming features speeches from policymakers, including the Federal Reserve.
During past sessions, the Fed has announced policy changes, provided guidance and sometimes stirred the pot. Past Fed Chairs Alan Greenspan and Ben Bernanke both announced major policy shifts at the symposium. Janet Yellen did not. Instead, she very comfortably and boldly reiterated current policy stance and objectives.
Central bankers from around the world have often stirred the pot – for good and for bad. Mario Draghi, president of the European Central Bank, has used the symposium to drop a few positive bombs on the world – and markets have reacted in kind. Haruhiko Kuroda, president of the Bank of Japan, has shocked many economists with aggressive speeches in years past. Funny enough, the Fed Jackson Hole symposium does not require bankers to announce policy changes. It’s really a chance for them to persuade and clarify.
What to expect from the Fed Jackson Hole symposium
Representatives from the Bank of Japan, Bank of England and the European Central Bank are likely to give speeches, but none will be more important that Fed Chair’s Jerome Powell’s Friday morning session. I don’t believe Powell will stray from the Fed’s message of slow-and-steady rate hikes, but you never know.
There are a number of topics to cover, including the pace of the global recovery, the value of the dollar vs the rest of the world and lower commodity prices. We may also hear about the European Central Bank’s continued QE policy and how inflation is hitting their economy.
For some of the people who attend, it’s about spending time in the pristine state Wyoming, going fishing and getting in a round of golf. As a trader, I am looking for some nuggets that might wiggle the markets a bit, especially in this time of low volatility, muted movements and challenging price action. Be on our guard as always. I am not expecting fireworks, but you never know!