The eyes of investors around the world will be watching Wyoming this week, as the Federal Reserve’s annual Jackson Hole retreat kicks off on Thursday, Aug. 24 and runs through Saturday, Aug. 26.
The meeting is expected to attract interest across global markets, and could present insight into the short and long-term policy intentions of Fed Chair Jerome Powell and his colleagues.
Here’s what to know about the upcoming conference in Jackson Hole, Wyoming:
What is the Jackson Hole meeting?
The Federal Reserve Bank of Kansas City has hosted this annual economic policy conference since 1978. The event location moved to Jackson Lake Lodge at the base of the Grand Tetons in 1982.
World-renowned economists will discuss their latest research papers, and key central bankers from around the world will give speeches on the policy outlook.
The conference is designed for casual, off-the-record discussion of the latest economic trends. Economists and central bankers enjoy meals together and participate in outdoor activities in the long afternoon hours.
What is the topic for this year’s Jackson Hole meeting?
The 2023 meeting theme is titled the “Structural Shifts in the Global Economy.” While fairly vague, economists think the hot topic is whether the U.S. economy will return to low interest rates, and those 2% 30-year mortgage rates, seen before the pandemic, or whether that was an era that will fade into the history books.
Who is speaking at Jackson Hole?
All eyes will be Federal Reserve chair Jerome Powell, who is headlining the conference. Powell is expected to give outlines of the Fed’s positions on rate adjustments and inflation in the near term, among other things.
Powell’s speeches at Jackson Hole have created serious buzz in the financial markets in the past. Just last year, Powell claimed the Fed may need to cause “pain” to calm inflation, even at the expense of jobs and economic growth. The S&P 500
SPX
and the DJIA
DJIA
dipped shortly after Powell’s speech in 2022.
Other speakers at the event this year include European Central Bank President Christine Lagarde, who is speaking on Friday.
Cable-news networks and the print media vie to get other Fed officials to sit down for exclusive interviews.
When is Powell’s speech?
Powell’s speech is set to begin at 10:05 a.m. Eastern on Friday, and will provide a chance for him to give the Fed’s thoughts on whether more interest-rate hikes will be needed to bring down inflation to the group’s 2% target amid surprisingly strong economic growth.
Minutes from the Fed’s July meeting revealed that “most” Fed officials see upside risks to inflation, “which could require further tightening of monetary policy.”
See also: Jackson Hole: Fed’s Powell could join rather than fight bond vigilantes as yields surge
Will there be another Fed rate hike?
This is one of the key questions heading into this week’s Jackson Hole meeting: How long do rates have to stay high in order to get inflation down?
In July, the Fed raised its benchmark interest rate to a range of 5.25% to 5.5%, the highest the Fed target rate has been since 2001. The next Fed meeting begins September 19.
“I would say it is possible we could raise [rates] at the September meeting if the data warranted, and possible we would choose to hold steady at that meeting,” Powell said in July.
Traders saw just an 13.5% chance of a rate hike in September as of Monday, according to the CME FedWatch Tool.
There are only three Fed policy meetings left in 2023. Financial markets also want to hear if there will be rate hikes in 2024.
How to watch Jackson Hole?
According to the Federal Reserve’s website, Powell’s speech at Jackson Hole will be streamed live on the Kansas City Fed’s YouTube channel. All of the other discussions are behind closed doors, which is merciful because they are often dense and full of jargon. Lagarde’s speech will be posted on the ECB’s website.
Papers and other materials discussed during the event will be posted on the Kansas City Fed’s website as they are presented in real time.
Journalists from MarketWatch and Barron’s will be also be conducting a live event on Friday at noon to further discuss the meeting at Jackson Hole.
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