The Fed’s Jackson Hole conference will take place Thursday through Saturday. The theme of this year’s conference is “Reassessing the Effectiveness and Transmission of Monetary Policy.” The key event is Chair Powell’s speech on the economic outlook at 10am New York time on Friday.
Powell’s past remarks at Jackson Hole have shed valuable light on his thinking and have traditionally affected market pricing. In its Q&A preview, Goldman's David Mericle says that he expects Powell to express a bit more confidence in the inflation outlook and to put a bit more emphasis on downside risks in the labor market than in his press conference after the July FOMC meeting, in light of the data released since then. A speech along these lines would be consistent with the bank's forecast of a string of three consecutive 25bp cuts in September, November, and December. A dovish surprise could be any hint that the level of the funds rate is inappropriately high, while a hawkish surprise could be highlighting instead that broad financial conditions are still quite easy.
With that in mind, here are excerpts from Goldman's Q&A on this year's Fed’s Jackson Hole Conference (full note available to pro subs in the usual place).
