The annual Jackson Hole Economic Policy Symposium will begin today. This is the second straight year it has been held online.
Chairman of the Federal Reserve Bank Jerome Powell will use the occasion to address short to medium-term economic outlook amid a COVID-19 resurgence spurred on by the Delta variant. With his speech to focus on “Macroeconomic Policy in an Uneven Economy,” Powell will stress the importance of the Fed’s stimulative policies in helping reduce unemployment within disadvantaged groups.
Powell may opt to give hints regarding the Bank’s intentions concerning its asset purchase program—worth nearly $120 billion in monthly procurements— but any firm declaration is unlikely. Amid a strong July jobs report—with unemployment falling from 5.9% to 5.4%—the Fed may be inclined to taper asset acquisitions in the short- to medium-term.
Nonetheless, Powell may seek to prolong the Fed’s monetary support as the strength of the post-pandemic recovery becomes increasingly shaky following recent virus surges associated with the Delta variant. For the same reason, the central bank is unlikely to push for interest rate hikes until 2022 when more robust medium-term economic outlook forecasts may be possible.
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Sinan is an analyst for the Current Developments Team and a regular contributor to the Daily Brief. A student of transatlantic affairs, he specialises in political, economic and energy affairs of Europe and the Middle East.