Expectations from Jackson Hole Economic Policy Symposium

The Jackson Hole Economic Policy Symposium starts tomorrow, August 25th, with many strategists foreseeing no major policy changes from the central bankers attending, according to a recent CNBC article.

"It's more or less a 'meeting of the minds' when it comes to Fed policy," said Chad Morganlander, Portfolio Manager at Washington Crossing Advisors. He said the Federal Reserve is typically the focus, but European Central Bank President Mario Draghi will be the most important speaker. Morganlander explains that any policy shift could have a ripple effect in the U.S. Draghi is expected to focus on the global economy's emerging issues, CNBC explains.

CNBC also states that it is unlikely that Federal Reserve Board (FRB) Chair Janet Yellen's remarks will deviate meaningfully from New York Fed President William Dudley's recent comments regarding inflation. Dudley essentially reinforced the central bank's gradual tightening plan over the coming months and said "sluggish" productivity growth is behind recent tepid wage growth. However, according to a Telegraph article, FRB Chairwoman Yellen is expected to tell markets as soon as this week to prepare for higher rates.

The FRB previously announced that the speech, which is set to take place Friday, August 25th, will center on the topic of financial stability and also touch on key topics such as the effect of tighter monetary policy and banking regulation.

Economist Lewis Alexander of Nomura said of the speech's contents, "We expect her to defend the current regulatory regime for large financial institutions. But she may also argue that the need to promote financial stability may be another reason for the Federal Open Markets Committee to increase their targets for short-term interest rates later this year, even if inflation is slow to pick up."

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