Every year in August, the global central banking community gathers in Jackson Hole, Wyoming. What to expect this year?
Over time, this two-day conference has gained interest from Wall Street as the “incubator” of new monetary policy tools as well as the place where central bankers provide hints of future monetary policy steps. In 2012, Fed Chair Ben Bernanke mentioned his “grave concerns” around the high and persistent US unemployment rate. Less than one month later, the Fed started its QE3 program: $40 billion of purchases per month, without an explicit end date. In 2014, former ECB Chair Mario Draghi effectively pre-announced the start of the ECB’s QE program with his promise that the ECB will do more to lift inflation expectations. These speeches might not be the most famous of both esteemed gentlemen, as Bernanke’s helicopter speech and Draghi’s “whatever it takes” comments were made elsewhere. But they certainly did move markets as both pre-announcements were a positive surprise for Wall Street.
