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- The annual Kansas City Federal Reserve Bank symposium in Jackson Hole, Wyoming starts on Thursday.
- Every year the great and the good of global central banking and economics descend on the mountain resort to discuss the big issues of the day.
- This year’s symposium is focused on the topic of “Changing Market Structure and Implications for Monetary Policy.”
- It is Fed Chair Jerome Powell’s first as head of the central bank, and comes at a time when he is under pressure from President Donald Trump.
The great and the good of global central banking are on the way to the exclusive ski resort of Jackson Hole in the remote US state of Wyoming for one of the benchmark events of its calendar.
Every year, the Federal Reserve Bank of Kansas City – one of 12 city based outposts of the USA’s central bank – hosts the Jackson Hole Economic Symposium, aiming to bring together central bankers from the world over to discuss the biggest challenges facing the global economy.
The symposium – which was first held in Jackson Hole during the 1980s to try and lure then Fed Chairman Paul Volcker away from Washington DC with the promise of good trout fishing alongside policy discussions – has a different focus every year. Last year attendees discussed “Fostering a Dynamic Global Economy.” This year will be focused on the topic of “Changing Market Structure and Implications for Monetary Policy.”
The event allows the world’s monetary policymakers to meet behind closed doors and discuss the big issues of the day away from the political glare of their everyday workings.
However, it also has an outward-looking role to play. Major bankers almost always give major speeches and frequently signal future policy intentions.
This year will be Federal Reserve Chair Jerome Powell’s first time attending the symposium as the most powerful central banker on the planet. It comes at a time when he is facing stern criticism from President Trump over his willingness to continue raising interest rates.
Trump is an avowed advocate of low interest rates and has directly criticised Powell’s approach several times in recent months, breaking with a longstanding convention that president’s refrain from commenting on the actions of the Fed, which is independent of government.
In an interview with Reuters on Tuesday, Trump said he was “not thrilled” by Fed chairman Jerome Powell’s decision to raise interest rates and would continue to criticize the Fed if interest rate hikes continued. It followed reports earlier in the day that Trump had criticised Powell at a private GOP fundraiser.
Trump’s criticisms give Powell’s planned speech at the symposium an interesting new dimension, although it is believed that Powell is effectively ignoring the president and taking no notice of his barbs. Powell will speak on Friday and is likely to give further hints about coming interest rate hikes in the US.
The Fed has already raised rates twice in 2018 and is expected to hike twice more before the year is out. September looks the most likely time for the next rate hike, with another likely in December if economic performance continues as expected. Powell could hint at any changes to that guidance, however.
“I expect Powell to maintain the central bank’s line given the continued performance of the economy and avoid being swayed by Trump’s comments or being drawn into discussing the actions of other central banks,” Craig Erlam, an analyst at OANDA, said in an email earlier this week.