Search ForexCrunch

Chair Powell will deliver remarks on Friday at the 2018 Jackson Hole conference in a speech entitled “Monetary Policy in a Changing Economy” (10am EDT) and will be a key event for the week, according to analysts at Nomura.

Key Quotes

“The program for the conference this year, covering “Changing Market Structure and Implications for Monetary Policy,” will be released at 8pm EDT on 23 August.”

“Relative to previous speeches by Bernanke and Yellen, we do not expect Powell’s speech to mark a significant milestone in policy or the Fed’s thinking regarding the economic outlook.”

“Powell has frequently gone out of his way to emphasize that he wishes to conduct monetary policy in a fashion that the general public will be able to follow and understand.”

“Rolling out any innovation during his Jackson Hole speech – at a conference attended by policymakers, academics and journalists, but not the general public – seems inconsistent with his approach thus far. However, there are a number of important issues regarding the Fed’s outlook that Powell could further clarify including the neutral rate, balance sheet reduction, FOMC communication and recent economic developments, particularly with respect to emerging markets.”

“Among those topics, as the policy rate is approaching its neutral level, any new information about the desired degree of monetary tightening in the future will be important.”

“In the near term, Powell’s views on external shocks associated with trade policy and emerging market turmoil could be important for the number of rate hikes this year.”

“Finally, it will be interesting to see whether he provides any hint on the next steps regarding pulling back further from forward guidance-based policy communication.”