It’s late August, which means we’re headed to Jackson Hole for the Kansas City Fed’s annual symposium, attended by top central bankers from around the world. And as usual, everyone is wondering in particular just what Fed Chair Jerome Powell – who’s expected to speak Friday morning – might have to say.
The US central bank just published minutes of its July policy meeting, and the record showed that, at the time, most Fed officials saw significant upside risk to inflation, which in turn may require even more tightening. On the other hand, two also favored holding rates steady, marking the first real hint of disagreement over the way forward that we’ve seen in quite some time.
Since that meeting, key data points have shown price and wage pressures continue to dissipate, which should bolster the case for an end to rate increases. But we’ve also seen ongoing strength in indicators of labor-market activity and consumer spending, which may keep policymakers uneasy about the prospects for ongoing easing of inflation.
Clarity on how Powell might be weighing those developments is a critical question. Beyond that, any clues about how the central bank might be thinking about a plan for rate cuts in 2024 will also garner a lot of attention. Otherwise, attendees will enjoy heady discussions about “Structural Shifts in the Global Economy,” the official theme of this year’s retreat.
