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Megan Smith, USA TODAY
Jackson Hole, Wyoming is one of the most popular ski destinations in the U.S. but the 48-mile-long valley is drawing a lot of attention lately for reasons that have nothing to do with hitting the slopes.
Later this week top economists from across the country including Federal Reserve Chairman Jerome Powell will gather in Jackson Hole for an annual economic policy symposium hosted by the Kansas City Federal Reserve. This will be the first in-person conference since the pandemic.
The meeting comes as inflation appears to have peaked and all the jobs lost during the pandemic have been fully recovered. But layoffs and fears that the U.S. is in a recession or nearing one continue to grow.
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That puts the Fed between a rock and a hard place. If the central bank starts to ease up on hiking interest rates it could lose its grip on inflation. But if it continues to aggressively raise rates, it could unintentionally put the U.S. in a recession and lead to widespread job losses.
The Fed has about a month to make that decision. In the meantime, investors anxiously await the Jackson Hole conference which could provide clues on the Fed’s next rate hike decision.
Here’s a guide on the history of the conference and what to expect this week.
What is the Jackson Hole symposium?
The Kansas City Federal Reserve has hosted an annual symposium attended by central bankers, policymakers, academics, and economists from across the world for 45 years. The first symposiums took place in Kansas City, Missouri, Vail, and Denver, Colorado, and focused on agricultural economic issues. The conference was permanently moved in 1982 to Jackson Hole.
Each year the Kansas City Fed, which represents Americans from Wyoming, Nebraska, Colorado, Kansas, Oklahoma, and parts of Missouri and New Mexico, selects a theme based on the most pressing economic issues. The regional bank selects and invites speakers to present research findings that deal with the conference’s theme. The multi-day event also features a keynote address from the Fed Chairman.
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This year’s theme is “Reassessing Constraints on the Economy and Policy.” That includes supply chain bottlenecks, shortages, and the Fed’s low-interest rate policy during much of the pandemic, according to an announcement the Kansas City Fed published ahead of the conference.
Where is the Fed meeting in Jackson Hole?
The meeting will take place at Jackson Lake Lodge, a resort located in Grand Teton National Park.
When is the Jackson Hole Fed meeting?
The meeting starts on Thursday and ends on Saturday.
When is Jerome Powell speaking and what will he say?
Powell is set to deliver his highly anticipated speech on Friday,at 10 a.m. est. You can live stream the speech here.
“We do not expect him to tip his hand on the size of the next move, which will depend on upcoming releases,” economists at JPMorgan said referring to new economic data that is due before the Fed’s September meeting.
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“But we believe he will push back against the idea that a dovish policy pivot is coming soon,” they said in a note sent Monday to clients.
Deutsche Bank economists anticipate Powell will reiterate the Fed’s commitment to getting inflation under control. They also think he will emphasize that if the Fed hikes interest rates by 50 basis points as opposed to 75 basis points, which it did for the past two meetings, it “in no way signals the Fed’s inflation fight is over.”
How will stocks react?
Stocks tend to be more volatile during the summer, even more so during the week of the Jackson Hole conference, said Megan Horneman, chief investment officer at Verdence Capital Advisors.
But this year it’s looking like it won’t shake up markets as much, she said based on a Reuters analysis showing investors have been less active in options trading ahead of the meeting compared to prior years.
“This is likely due to investors believing more data is needed from an inflation standpoint before the Federal Reserve announces a change of course from the current rate hike environment,” Horneman added.
Yet stocks took a big dive on Monday, sending a warning sign to investors that the summer rally is fizzling out. The Dow Jones Industrial Average fell closed down 1.9% while the S&P 500 and Nasdaq closed down 2.1% and 2.5%, respectively.
The indexes were little-changed after markets opened on Tuesday.
When does the Fed meet again?
The Fed’s next meeting is on September 20. And on September 21 the central bank will announce its decision on interest rates.
Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here
