Federal Reserve chairs usually approach the annual confab of central bankers at Jackson Hole, Wyoming, in one of two ways. Either fly under the radar screens of markets, or offer up some eye-grabbing policy announcement.
It would not surprise me if Jay Powell, in his keynote speech this week, opts for the former. Some might even see this as a more risk averse option. That would be unfortunate. The wellbeing of the economy, the Fed and financial markets call for Powell to take the latter route. It is also the less risky option.
Vacillation by Fed chairs on how to handle their Jackson Hole pronouncements is natural. Choosing a lower key approach fits with the symposium’s stated intention of bringing “together economists, financial market participants, academics, US government representatives and news media to discuss long-term policy issues of mutual concern.” Yet with all those in attendance and the media coverage this entails, it can also be appropriate to spice things up by signalling an upcoming policy change.