The Kansas City Fed and its President Esther George are hosting their 42nd annual economic symposium in Jackson Hole, Wyoming this week. Global central bankers and leading bankers, CEO’s and economist meet to discuss the issues of the day so aptly described by the symposium’s title. Jerome Powell is attending as Fed Chair for the first time. The timing of this meeting is very interesting, if not important as it is being held just prior to the 10-year anniversary of the financial crisis. Friday morning, Powell will give a speech titled “Monetary Policy in a Changing Economy”, which again is a very appropriate title for the current economy he must study. It’s a changing one.
The Dow, S&P, and NASDAQ May Be Affected
The U.S. economy is not only in a shift from recovery to faster growth, global economies are different in a general. According to a statement put out by the KC Fed, discussions will include “the rise of very large firms and market concentration in several industries” since according to that same statement; they cost the economy capital investment, productivity growth and, wage growth among other things. Given those subjects, we are likely to get headlines out of the symposium that speaks to inflation which could affect the yield curve as well a talk of tariffs, the size of debt (especially emerging market, dollar-denominated debt) and Presidential influence on Fed decisions. We’ve already had both George and Dallas Fed president Robert Kaplan speak to that last point, echoing each other with an assurance of an independent Fed. In general, these topics have a high probability of moving markets. Historically, the Dow, S&P 500, and NASDAQ are calmer after the Fed Chair delivers a speech, but given the many differences in the current climate, both economic and political, the symposium is unlikely to be a symphony for stock markets.