Investors’ anticipation grows for the Jackson Hole Economic Symposiumthe annual three-day U.S. central bank conference organized by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming. After the market crash in early August and subsequent recoveries on the back of comforting macroeconomic data, there is great uncertainty about the size of the rate cut that will be implemented at the next meeting of the Fed. The words of Chairman Jerome Powell will therefore be under observation, as he is expected to prepare the ground for the September meeting.
The appointment
Every year since 1978the Federal Reserve Bank of Kansas City hosted a symposium on a major economic issue facing the U.S. and global economies.
Among the participants The symposium brings together leading central bankers, finance ministers, academics and financial market participants from around the world. Participants gather to discuss economic issues, implications and policy options related to the symposium topic. acts The symposium includes presentations, comments and discussions.
The 2024 Economic Policy Symposium, “Reassessing the Effectiveness and Transmission of Monetary Policy,” will be held from 22nd to 24th August.
Powell’s intervention
Federal Reserve Chairman Jerome Powell will discuss the economic outlook at 10 a.m. Eastern Time (4 p.m. CET) on August 23rdcontinuing a precedent of the Fed chief giving a keynote speech at the three-day conference.
Powell will use his Jackson Hole speech to prepare the ground for an interest rate cut in September, with the actual size of the move being determined by August employment data due a week later, experts say.
It is widely expected that the Fed will reduce the cost of money at its next meeting on 17-18 Septemberbut there is no certainty about how big that cut will be. The Fed has kept its benchmark rate in the 5.25%-5.50% range for more than a year now, to slow economic growth and keep downward pressure on inflation.
Recent events
Much of the uncertainty about the extent of the rate cut stems from events in the markets in recent weeks. Stock markets have recovered a large portion of the sharp sell-off at the beginning of the month and remain solidly up year-to-date. Despite the early August scare, partly related to a weaker-than-expected July jobs report and the violent unwinding of the popular Japanese yen carry trade, investors now appear optimistic about the U.S. economic outlook.
Just two weeks ago, there were expectations of a 50 basis point cut in September, or even an emergency intra-meeting move, but since then the comments from Fed officials showed that they are more optimistic about the economic prospects of the world’s largest economy. In addition, the recent macroeconomic data were more encouraging, suggesting that inflation is indeed falling but that the economy is far from a recession; these included inflation on Wednesday, and retail sales and industrial production on Thursday.
