Since 1978 the Federal Reserve Bank of Kansas City has hosted an annual economic policy symposium at Jackson Hole, Wyoming. Always a who’s who of central bankers, so called policy experts and academicians, that focus on issues of immediate concern and also emerging issues and trends.
Like all conferences, the discussions amongst the participants in the quiet moments are perhaps the most critical to the symposium’s , theoretical, success. The press is not excluded. In the tradition of Hillary’s State Department play for pay policy, those members of the Fourth Estate who are deemed acceptable must fork over an admission fee.
Various position papers are presented but none more anticipated than the final speech on Friday by Janet Yellen. Currently the betting odds are proclaiming that rates will be raised in March of 2017. Didn’t we hear it was to be March of 2016? Then we heard July or perhaps Dec. would be the dates for liftoff. More than likely, given the REAL status of the U.S. economic picture, no one will be surprised if Grandma simply, once again, reverts back to muddled phrases signifying status quo.
Recently several Fed officials have pointed out that the U.S. central bank was close to hitting its target for 2% inflation and full employment (discounting of course 90mm people not in the participation pool). If the objective is accomplished it seems only logical that higher rates will be in the offing and what better opportunity to make the announcement than the historic Jackson Hole Symposium. I say historic since this has been the time for another Fed Chairman to make his earth shattering announcements.
As the economy started to falter in March of 2009, after having shown surprising resilience from a disastrous stock and housing market, large scale asset purchases or Quantitative Easing (QE) was announced. A second addition of QE was hinted at Jackson Hole in August of 2010 and officially announced in November. Then came QE 3.
Economists, pundits and investor/traders were all waiting, questioning and debating Helicopter Ben’s next move and his statement at Jackson Hole.
With the ability of hindsight, we now know that Ben kept the printing presses running.
Now it is Janet Yellen’s turn to seize the moment, or not. All eyes will be riveted on a small town in Wyoming as the next phase of the grand Keynesian experiment is played out.