Jackson Hole Economic Policy Symposium Starts Thursday
This week, the world’s top central bankers, including Federal Reserve Chair Janet Yellen, European Central Bank President Mario Draghi and representatives from more than 40 other countries, meet for an annual economic policy symposium in Jackson Hole, Wyoming. This year’s summit is especially important as central banks from around the world are implementing policy changes after years of financial recovery.
Any central bank’s policy changes will have a gradual impact internationally. Many economists are closely watching for signals from Draghi’s scheduled speech. However, Reuters reports an unnamed source indicated, “expectations that this will be a big monetary policy speech are wrong.”
Inflation has been tepid this year, and in the United States, it remains below the targeted rate. Low unemployment and economic growth have yet to initiate significant momentum and price increases have been slow. US inflation dropped 1.4% in June to a level of 1.3%. The European Central Bank’s inflationary gauge is also below 2%. The Phillips Curve theory that low joblessness begets higher prices may no longer apply to today’s economic conditions.
The annual meeting of the minds almost guarantees market-moving information and most financial analysts suspect this year’s summit will explore inflation. Dallas Fed President, Robert Kaplan, explained, “what we’re trying to analyze is -- how do we improve growth?”
Sources: Bloomberg, CNBC, MarketWatch