Fed’s Jackson Hole conference is underway: Here’s what to expect

Christine Lagarde, president of the European Central Bank (ECB), from left, Kazuo Ueda, governor of the Bank of Japan (BOJ), and Jerome Powell, chairman of the US Federal Reserve, at the Jackson Hole economic symposium in Moran, Wyoming, US, on Friday, Aug. 25, 2023.

The Federal Reserve Bank of Kansas City’s annual gathering in Jackson Hole, Wyoming kicked off Thursday evening with a dinner filled with central bankers, economists and reporters from the around the world.

Here’s what to expect from the three-day conference:

For investors and Fed watchers, Chair Jerome Powell’s keynote speech on Friday at 10 a.m. New York time will garner the most interest.

With the Fed on the cusp of lowering borrowing costs from a more than two-decade high, Powell’s comments will be closely parsed for any kind of signal about the timing, size and pace of interest-rate cuts. Any remarks that offer insight into his views on the labor market, and how risks of further weakness stack up against inflation concerns, will also be scrutinized.

Investors are pricing in a quarter-point rate cut at the Fed’s Sept. 17-18 gathering but see almost a full percentage point of reductions by year end, according to futures markets.

While no regional bank presidents or other Fed officials are slated to speak based on the main program schedule, many of them will be in attendance and taking media interviews. Atlanta’s Raphael Bostic, Philadelphia’s Patrick Harker and Chicago’s Austan Goolsbee will all appear on Bloomberg Television Friday.

Beth Hammack, who officially took office as head of the Cleveland Fed earlier this week, will also be joining her new colleagues at the event. She is scheduled to vote for the first time at the Federal Open Market Committee meeting next month.

Andrew Bailey, head of the Bank of England, will give a speech at 3 p.m. eastern on Friday. It’ll be his first remarks since Aug. 1, when the UK central bank cut its benchmark lending rate for the first time since the start of the pandemic. Investors, who expect more cuts later this year, will be looking for his reading on inflation data that was a touch cooler than expected as well as recent jobs figures.

The panel discussion on Saturday, which focuses on reassessing the effectiveness and transmission of monetary policy, will highlight views from central bankers from across the globe. Brazil’s Roberto Campos Neto will be joined by Norges Bank’s Ida Wolden Bache and the European Central Bank’s Philip Lane at 12:25 p.m. eastern time.

Other attendees include Portugal’s Mario Centeno, Finland’s Olli Rehn, Austria’s Robert Holzmann, Netherlands’ Klaas Knot, Belgium’s Pierre Wunsch, Chile’s Rosanna Costa, and Canada’s Tiff Macklem. Indermit Gill of the World Bank, Pierre-Olivier Gourinchas of the International Monetary Fund and Jared Bernstein, chair of the White House’s Council of Economic Advisers, are also in attendance.

Panels and Papers
Economists will also present four research papers during the conference.

Up first is Brown University’s Gauti Eggertsson, who will present a paper examining the determinants of inflation at 10:30 a.m eastern on Friday.

At 11:55 a.m., Hanno Lustig of Stanford University presents his paper on the implications of fiscal shocks for monetary policy.

Also on Friday, University of Chicago’s Anil Kashyap, University of California, Irvine’s Eric Swanson and Patricia Mosser of Columbia University’s School of International and Public Affairs will discuss financial markets and the transmission of monetary policy at 12:55 p.m.

In Saturday’s first paper, at 10 a.m. eastern, University of Chicago’s Carolin Pflueger delves both into transmission as well as changing perceptions of policy. At 11 a.m., New York University’s Philipp Schnabl discusses the role of the balance sheet in monetary policy and lessons learned.