Jackson Hole Roadmap: Understanding "The Most Critical Meeting Next Week" in One Article

Next week, central bank governors and economists from around the world will gather at the annual Jackson Hole Global Central Bank Symposium, one of the most important global central bank events. The market will closely monitor the event to assess the monetary policy trends for the remaining year.

Goldman Sachs detailed the agenda for this year's symposium in a report this week, with the most anticipated being the speech by Chairman Powell. Federal Reserve Chairman Powell will deliver a keynote speech on Friday, August 23 at 10:00 am Eastern Time (Friday 22:00 Beijing Time), which will be live-streamed without a Q&A session.

The Bank of England also announced that Governor Bailey will deliver a lunchtime speech on Friday at 3:00 pm Eastern Time, and ECB Chief Economist Philip Lane will participate in the Saturday meeting summary panel discussion. In addition to Chairman Powell's keynote speech, there will be a Q&A session after each speech.

Goldman Sachs pointed out that the market may receive signals of "rate cut confidence" and "data dependency". It is expected that Powell's information and off-the-record interviews will be similar to what has been heard in the past few weeks, indicating that the Fed is nearing a rate cut, but the extent of easing will depend on the upcoming data.

The theme of this year's symposium is "Reassessing the Effectiveness and Transmission Mechanism of Monetary Policy", which is an important topic in the recent rate hike cycle with many possible research areas. The theme of the conference usually determines the direction of the policy maker panel discussions, but Powell's keynote speech will focus more on current policy issues.

When will the schedule be released? What are the main activities scheduled?

Regarding the detailed schedule:

The complete schedule will be released on Thursday, August 22 at 8:00 pm New York time. The conference will be held in Wyoming, with all times in Mountain Time (MT), which is two hours behind Eastern Time and 14 hours behind Beijing Time.

There will be a keynote speech on Friday morning, as well as two other fixed events, the lunchtime speech on Friday afternoon and the closing summary panel discussion on Saturday. The schedule varies slightly each year, but panel discussions usually include central bank governors from around the world, officials from international organizations such as the IMF or BIS.

Confirmed attendees so far include Powell, Bailey, and Philip Lane:

Powell will deliver a speech on economic outlook via live webcast, which is usually considered the keynote speech; Bailey will deliver the lunchtime speech, and ECB's Lane will participate in the panel discussion on Saturday, where he may engage in discussions with central bank governors from emerging market countries and leaders of international organizations. Although BOJ Governor Kuroda participated in the panel discussion last year, he has been asked to attend a parliamentary meeting on August 23 to discuss recent rate hike decisions, so he may not be present.

In addition to a series of speeches, media interviews are also worth paying attention to, especially those related to recent policies. These interviews usually start when people begin to arrive on Thursday and continue throughout Friday, with the participation of some Fed officials, central bank governors, and scholars. Generally, board officials usually wait until after the chairman's speech, with the Kansas City Fed President, who usually hosts the conference, conducting interviews on Thursday before the conference begins

What is the theme of the meeting? What signals will central bank officials convey?

More importantly, what information will policymakers convey? Goldman Sachs pointed out:

The market may receive signals of "rate cut confidence" and "data dependency", expecting Powell's information and off-site interviews to be similar to what we have heard in the past few weeks, that is, the Fed is now close to cutting rates, but the extent of easing will depend on the upcoming data.

Goldman Sachs economists expect the Fed to cut rates by 25 basis points for the third time in a row starting from September, and believe that the market's pricing of a 50 basis point rate cut at the next meeting after the weaker-than-expected July employment data is too aggressive.

The market may hear more comments similar to those in early August, that the Fed's work is not a response to single-point data, key data including personal consumption expenditures (PCE) and the August non-farm employment report are expected to be released shortly after the Jackson Hole symposium, which may emphasize the need to wait for these data before deciding on the extent of easing.

At the same time, we may also hear some assurances that if the economy experiences a more severe downturn, the Fed is prepared to act swiftly. Overall, this information should allow risk sentiment to continue to recover, with slightly rising yields following overall positive activities and inflation data over the past week.

In addition, key information includes discussions on this year's meeting theme, as Goldman Sachs stated:

The theme of this year's meeting is "reassessing the effectiveness and transmission mechanisms of monetary policy." The transmission and effectiveness of monetary policy have been an important topic throughout the recent rate hike cycle, with many possible areas of research. Some recent studies have focused on the impact of different mortgage market structures, inequality, increasing public debt, the proliferation of online banking services, and special considerations for emerging markets.

Typically, the meeting theme determines the direction of discussions for the policymaker group, but the Fed Chair's keynote speech focuses more on current policy issues. Powell recently mentioned in his speech at Jackson Hole, "It doesn't have to have anything to do with the theme of the meeting," pointing out that he usually tries to deliver a speech focusing on the current economic outlook and providing some higher-level points, such as what we have learned recently