Later this week, the Kansas City Fed will be hosting some of the biggest and brightest economists and central bankers at a retreat/symposium in Jackson Hole. This annual summit has speeches from very important policymakers, including the Federal Reserve. This year will mark the first for Chair Jerome Powell at the event (though I believe he attended prior conferences as a Fed official).
In past sessions the Fed may have used the pulpit as a means to establish a new twist or turn on policy. Ben Bernanke did this quite effectively post financial crisis, while Alan Greenspan often uttered an interesting tone and guidance. Recent years saw Chair Yellen very comfortably and boldly reiterate current policy stance and objectives.
Representatives from the Bank of Japan, Bank of England and the EU are likely to give speeches as well, but none will be more important that Powell's Friday morning session. In years past Mario Draghi used the forum to drop a few positive bombs on the world, and the markets reacted in kind. Japan's Kuroda shocked many with some aggressive speeches in years past. This forum does not require policy moves per se, rather a chance to persuade and clarify.
What might we expect this time around? Frankly, there are a number of topics to cover including the pace of the global recovery, higher dollar currency vs the rest of the world, and lower commodity prices. Further, we may hear such things from the European central bank about continued QE policy and how inflation is hitting their economy. I don't believe Powell will go away from the Fed's message - slow rate hikes.
For some, it's all about the pristine state of lovely Wyoming, the fishing and other events. But for us outsiders, we are looking for some nuggets that might wiggle the markets a bit, especially in this time of low volatility, muted movements and challenging price action. Let's be on our guard as always, we are not expecting fireworks but you never know!
