The Jackson Hole Economic Symposium
Every year in late August, the Kansas City Federal Reserve Bank becomes home to central bankers, policymakers, academics, and economists from various parts of the world. The event is the Jackson Hole Economic Symposium. You can read about the symposium’s history in a publication by the Kansas Fed titled In Late August.
The symposium has been held for more than 30 years. This year, it took place from August 25–27. In attendance were, among others, Fed chief Janet Yellen, Bank of Mexico chief Agustín Carstens, and Bank of Japan chief Haruhiko Kuroda.
The theme of the conference was “Designing Resilient Monetary Policy Frameworks for the Future.” Yellen said the theme “encompasses many aspects of monetary policy, from the nitty-gritty details of implementing policy in financial markets to broader questions about how policy affects the economy.”
In this series
In this series, we’ll focus on Yellen’s remarks at the symposium. She focused on the tools available to the Federal Reserve before the Great Recession, the tools it used to combat the recession, and what she sees for the future of monetary policy for the United States. We’ll also look at the views of Carstens and Kuroda.
Let’s start with a topic that has the most immediate impact: interest rate hikes in the United States. The graph above shows the sharp change in rate hike expectations over the past three quarters in which the Federal Reserve has released its Summary of Economic Projections.
In light of the July 2016 monetary policy meeting minutes, Yellen’s speech at the symposium was viewed as an important input into the course of US federal funds rate increases going forward. Her remarks were detrimental to equities (VTI) (ITOT) in general and to the utilities sector (NEE) (DUK) (D) in particular. Let’s look at what she had to say about it in the next part.