Jackson Hole Symposium: Why Is It Important?

All eyes will be on the Jackson Hole in Wyoming this week, where the annual Jackson Hole Economic Symposium will be held by the Federal Reserve Bank of Kansas City. This years symposium will take place from 23rd until the 25th of August and the topic for the upcoming event will be “Changing Market Structure and Implications for Monetary Policy”.

About Jackson Hole Economic Symposium

The key feature of the meeting is the discussion that takes place between the participants. Because of the high-profile participants and the topics that are discussed in the event, there is a considerable interest in the symposium, however, to help foster the open discussion that is critical to the event, the attendance is very limited. The event receives a large number of requests from media agencies worldwide, however, the press presence is also limited to a group that is selected to provide transparency to the symposium.

Importance of the event

The symposium is closely followed by financial markets participants around the world and over the past decade it has attracted more attention, this is mainly because what has happened in the past. Some of the biggest monetary policies were initially revealed at the event, although they were not formally announced. During the event, any unexpected comment from any participants can influence the global financial markets. Here are some notable moments from the Jackson Hole Symposium:

• 2005 – Raghuram Rajan (then the professor at the University of Chicago and former governor of Reserve Bank of India) warned about risks that the financial system had absorbed throughout the years. Three years later, the US subprime mortgage crisis erupted into the global financial crisis.

• 2012 – Michael Woodford (macroeconomist and monetary theorist, Columbia University) presented where he said that Fed’s stance on keeping its main interest rate near zero until a certain time would reflect pessimism about the speed of the economy’s recovery. Later that year, the Fed announced it would keep rates near zero until unemployment fell to 6.50% and inflation did not climb above 2.50%.

• 2014 – Mario Draghi (ECB president) hinted that the ECB was edging closer to embarking on its QE path. During the event, Mario Draghi said that ECB could use ‘all the available instruments’. His announcement came just two months after ECB introduced negative deposit rates in the Eurozone, the financial markets rallied during his speech at the Jackson Hole.

The symposium is a must watch financial market event and it is worth keeping an eye on the discussions and speeches during the event as we may see statements from some of the most influential people from around the world. This year, Federal Reserve Chairman Jerome Powell will headline the event in Jackson Hole with a speech about monetary policy in a changing economy, according to the Fed Board so it’s time to mark your calendars!

Klāvs Valters

Market Analyst