Economic Policy Symposium at Jackson Hole
The Jackson Hole Economic Policy Symposium is an annual conference sponsored by the Federal Reserve Bank of Kansas City. It began in 1978. To date, there have been 37 conferences. At each of the symposiums, participants have included prominent central bankers, finance ministers, academics, and financial market participants from around the world. They meet to discuss an important economic issue that’s facing the U.S. and world economies.
The event is designed as a forum for central bankers, policy experts, and academics to come together to focus on a topic that isn’t an immediate concern. The conference looks at future emerging issues and trends. Members gather to discuss the economic issues, implications, and policy options regarding the symposium’s topic. The chart above shows some of the topics discussed at the Jackson Hole Symposium in the past.
Objective and importance of the event
The symposium’s proceedings are closely followed by market participants around the globe. The symposium includes papers, commentary, and discussion. It’s a global discussion among individuals with considerable political influence over their respective economies. During the symposium, an unexpected comment from any of these heavyweights can affect the currency and global stock markets. Comments at the symposium can also affect the stock markets’ future performance.
For example, a central banker’s comment that indicates a near-term rise in interest rates could affect the performance of bond market exchange-traded funds (or ETFs). Bond market ETFs include the Vanguard Total Bond Market ETF (BND) and the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). LQD invests in bonds of companies like Verizon Communications (VZ), Merrill Lynch (BAC), and General Electric (GE).
The 2014 Jackson Hole Symposium
This year, the Kansas City Fed’s annual symposium was held in Jackson Hole, Wyoming. It was centered on the theme, “Re-Evaluating Labor Market Dynamics.” The conference was attended by the world’s top central bankers including the Fed’s Janet Yellen, the European Central Bank’s (or ECB) Mario Draghi, the Bank of Japan’s Haruhiko Kuroda, and important academic figures.
The symposium allowed central bankers to discuss and debate how much slack is in the labor market. They discussed innovative ways to measure the labor market’s slack. Labor market dynamics play an important role in monetary policy decision-making. Currently, labor market slack is important because central bankers are determining how much longer monetary policy should be accommodative.