SUMMARY
Situated at an average altitude of 6,000 feet in the Rocky Mountains, Jackson Hole is a top tourist destination for camping, skiing and agrotourism. This settlement in Wyoming – the least populated US state – is also known as the ‘Davos for central bankers’. It is here that global central bankers, economists, financial market participants and policymakers will meet between August 22 and 24 this year to discuss the most pressing economic issues. What Fed chair Jerome Powell said in 2022 led to a big sell-off. His next speech on Friday (Aug 23) will be an important one to watch.
1 / 5The US markets have recovered $3 trillion in value after weak jobs data triggered the year’s biggest sell-off and the fear of recession in the world’s largest economy. Whether these gains remain on the table depends on what the chair of the US Federal Reserve has to say on August 23 at Jackson Hole, the annual meeting place for the global central bankers to discuss the world’s most pressing economic issues.
2 / 5Why is the 2024 Jackson Hole Symposium significant? “If we don’t hear what we want, that would trigger a big sell-off,” Bloomberg quoted Eric Beiley, executive managing director of wealth management at Steward Partners Global Advisory, as saying. So, what do the global markets want to hear from Jerome Powell, the chief of the American central bank? That he’s open to a 50-basis-point rate cut. Photographer: David Paul Morris/Bloomberg.
3 / 5These are some of the recent data on the US economy. The Fed’s paramount goal this year should be to re-establish the effectiveness of its forward policy guidance. It must also continue to rebuild its credibility and international standing, both of which have been eroded by the mistakes made over the last four years, from delayed policy implementation and poor forecasting to confusing communication and lapses in bank supervision, Mohanmmad El Erian, a globally renowned economist who was the CEO of the world’s biggest bond trader PIMCO between 2007 and 2014.
4 / 5Have the events at Jackson Hole affected global markets in the past? Almost never. According to Dow Jones Market data, the S&P 500 has given an average return of 0.4 per cent during the event since the 2000s. The index has recorded an average gain of 0.1 per cent in the month after the three-day event. Except on August 26, 2022, the S&P 500 fell 3.4% after Powell batted for a tighter monetary policy to curb inflation, shattering investor sentiment.
5 / 5However, there’s no pressure on Powell to reveal his cards at Jackson Hole. Given that another jobs report is on the cards in September, just ahead of the next Fed meeting, he and his team have enough time to decide. “Looking at past Jackson Hole speeches, it’s not likely we’ll get very prescriptive remarks from Powell,” Tom Hainlin, national investment strategist at US Bank Wealth Management, told Bloomberg.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
