What not to expect? Much guidance about what the Fed will do at its next meeting in September. He’ll also likely underscore what minutes from the Fed’s latest meeting showed: that officials expect rates to remain “uncomfortably high” for some time after they stop raising them. To that end, he’ll likely reiterate that Fed officials’ economic projections released in June - which showed the federal funds rate reaching a level higher than markets currently expect - is still a decent guide for policy, Deutsche Bank economists said in a note previewing the conference. What to expect from Powell? After markets took a dovish view of Powell’s press conference remarks on July 27, we expect he won’t mince words at Jackson Hole. Powell will be the one to weave those views together this week in a highly anticipated speech Friday morning at 10 a.m.
On the other hand, several have warned of the risks of going too far, and acknowledged that the full effect of interest rate increases is still making its way through the economy.
| Jonathan Crosby/AP PhotoĪ chorus of officials has emphasized in recent days that they still have a long way to go, and they continued to warn about the risks that inflation could become entrenched in the U.S. New York Fed President John Williams, left, and Fed Chair Jay Powell walk together outside the Jackson Hole Economic Policy Symposium in 2018. And they must determine how much further to raise rates after that to keep reining in prices without tipping the economy into a recession. Now, Fed officials must manage the delicate task of knowing when to back off those super-sized rate increases without sending an inadvertent signal that the inflation fight is wrapping up. (It’s Jackson Hole week we’re leaning into the cowboy metaphors.) That effort has included a three-quarter-percentage-point increase in June - the first since 1994 - followed by a second one in July. have undertaken an aggressive rate hiking campaign, lifting interest rates an astounding 225 basis points since March to wrangle untamed inflation. It feels like we’ve said it over and over, but it’s a particularly challenging and precarious moment for the central bank. The conference could be the most important economic policy event of the year, as investors look to Fed Chair Jay Powell to lay out his expectations - or hopes/dreams? - for the next several months and into 2023. 6.įederal Reserve officials head to Jackson Hole this week for the Kansas City Fed’s annual three-day symposium, along with some of the world’s pre-eminent economists and central bankers. We’ll be back on our normal schedule on Tuesday, Sept. PROGRAMMING NOTE : Morning Money won’t publish from Monday, Aug.
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