Macroscope | Why this year’s Jackson Hole meeting is worth watching
‘The risk is that markets are caught napping’
The annual central bank jamboree at Jackson Hole, Wyoming is again upon us. Running from August 24-26 and hosted by the Kansas City Federal Reserve, this talking shop for central bankers and other invited thought leaders has heralded some market-moving surprises in recent years. 2017 may be no exception.
The risk of a surprise that will roil the markets is only increased by the fact that the build-up to the start of the symposium has seen attempts to play down the possibility of such an eventuality. The risk is that markets are caught napping.
European Central Bank (ECB) President Mario Draghi will be attending the symposium for the first time in three years. His attendance was announced as far back as July 13 and had raised expectations that the ECB chief had booked his slot early with the intention of saying something significant on policy.
After all, on his last visit in 2014, Draghi stole the show with an unscripted comment about low inflation in the euro zone that proved, some months later, to be the precursor to the ECB’s adoption of additional ultra-accommodative monetary policy measures in the form of large-scale asset purchases.
As this year’s symposium is occurring less than two weeks before the next ECB policy meeting, investors had wondered whether Draghi would this time use the Jackson Hole platform to flag the possibility of a measure of tighter euro zone monetary policy that would then be unveiled in Frankfurt on September 7.
