This week, central bankers from across the globe will convene in Jackson Hole, Wyoming, for the Kansas City Federal Reserve's annual symposium at Grand Teton National Park, a gathering that has risen to prominence as the world's foremost economic event. Investors closely monitor this symposium, as the statements from the most influential monetary policymakers can sometimes significantly impact markets. Here's what to anticipate and why it's important to pay attention.
The event typically hosts around 120 guests, including most of the Federal Reserve's 19 policymakers and several dozen central bankers from Europe, Asia, Africa, the Americas, and other regions. Additionally, the symposium welcomes dozens of economists, government officials, and representatives from international organizations, along with a group of journalists. The details of the attendees and the agenda remain confidential until Thursday evening.
The symposium traditionally kicks off on Thursday with a dinner under antler-decorated lights at the historic Jackson Lake Lodge. Guests pass by a preserved grizzly bear in the public lounge, which offers a panoramic view of the Teton Range. The conference continues until midday Saturday, primarily focusing on discussions of academic papers. This year's theme is "reassessing the effectiveness and transmission of monetary policy." Despite the academic nature of the event, many participants take time to enjoy hiking and some even dress in western attire.
The highlight of the event is Fed Chair Jerome Powell's speech on Friday morning. Investors are eager to hear whether Powell believes inflation has cooled sufficiently to warrant an interest rate cut next month and if concerns about rising unemployment might lead to a significant reduction in borrowing costs. Most analysts anticipate a rate cut but not a substantial one, though as Deutsche Bank economists point out, "it will be challenging for Powell to commit to a specific path at Jackson Hole." Powell has emphasized his data-dependent approach, with key economic data expected before the Fed's September 17-18 meeting.
While significant market movements during the Jackson Hole symposium are uncommon, they do occur. For instance, in 2022, the S&P 500 index fell 3.4 percent after Powell warned of potential pain from taming high inflation, although this pain has largely not materialized. In 2019, the S&P 500 dropped 2.6 percent following Powell's speech, influenced more by escalating US-China trade tensions. Former Fed Chair Ben Bernanke notably sparked two stock rallies at Jackson Hole, in 2009 and 2010.
The Kansas City Fed has hosted this annual symposium since 1978, initially focusing on agriculture. The organizers expanded the scope in the early years to attract prominent figures. In 1982, they relocated the event to its current site to entice then-Fed Chair Paul Volcker, a flyfishing enthusiast, who attended the opening dinner in his fishing attire. Alan Greenspan, who led the Fed from 1987 to early 2006, established the tradition of the central bank leader's address in 1991.
