A phrase that has been used quite often in the past week is the Jackson Hole Symposium. The question then gets raised exactly what is the Jackson Hole Symposium and why is it so important. A quick history lesson will give us an idea of the significance of this event.


Jackson Hole Economic Symposium

The Jackson Hole Economic Symposium, often referred to simply as the “Jackson Hole Symposium,” is an annual symposium that brings together central bankers, financial market participants, academics, and policymakers to discuss important economic and monetary policy issues. The symposium is held in Jackson Hole, Wyoming, and is hosted by the Federal Reserve Bank of Kansas City. It has become a prominent event in the world of economics and finance.

The history of the Jackson Hole Symposium dates back to 1978 when the Federal Reserve Bank of Kansas City started organising an annual economic policy conference. The idea was to provide a platform for central bankers and economists to exchange ideas and insights on various economic and monetary policy topics in an informal setting. The Jackson Hole location was chosen for its picturesque setting and conducive environment for thoughtful discussions.

Over the years, the symposium has gained significance as a forum where central bankers and policymakers can discuss and address major economic challenges and policy dilemmas. The discussions held at the symposium often have implications for global financial markets and monetary policy decisions.


Now that we know what the history is, what makes this year’s event so special?

Cast your mind back to last year’s event, where Fed Chair Powell’s speech was the main event of the symposium. Jerome Powell’s speech at the 2022 Jackson Hole symposium was a major policy announcement in which he outlined the Federal Reserve’s plans to combat inflation “forcefully and rapidly” and was committed to bringing inflation back down to its 2% target. Powell’s speech was well-received positively by the markets which interpreted it as a sign that the Fed is serious about fighting inflation. However, some economists warned that the Fed may be too aggressive in its tightening cycle and that this could lead to a recession.

CPI was over 8% when Powell gave that speech, and has now cooled to a cycle low of 3%. And this was achieved without the “economic pain” that many, including the Fed, had feared. In fact, a year later, the economy is still robust, with strong employment numbers and higher-than-expected growth. Sure, we know manufacturing is contracting, but it appears the U.S. is on track for a soft landing, black swans aside.


See below US inflation versus Fed Funds rate


With all that has happened over the past year, markets will look to Mr. Powell as to the direction the Fed will take in the upcoming months and whether they have paused their interest rate hikes. Most of the market players are hedging their bets that the rate hiking cycle is over, but will listen with a keen ear on whether Mr. Powell will be more hawkish than expected or strike a dovish tone. It will be in the best interest of the US dollar to stay hawkish, but with a divided FOMC as the minutes suggested there could be some surprises.


Either way, the markets will be honed into the speech as it’s the major economic event this week and can shift markets markedly.