Global economists and central bankers will gather in Jackson Hole, Wyoming, next week for the Federal Reserve’s annual economic policy symposium, a meeting that arrives after a relatively quiet August for central bank communication and as the autumn rate-decision cycle starts to come back into focus.
The main event for markets is Federal Reserve Chair Warsh. According to Zhuifeng Trading Desk, Warsh is scheduled to deliver the keynote speech at 10 a.m. Eastern Time on Friday, Aug. 28. It will be his first appearance at Jackson Hole since taking over as Fed chair. More than the formal conference theme, markets are expected to focus on what he says about the economic outlook and the path of future interest rates.
Warsh’s first Jackson Hole appearance leaves markets waiting for clues
The full conference schedule will be released at 8 p.m. Eastern Time on Thursday, Aug. 27. Speakers already confirmed include European Central Bank Governing Council member Isabel Schnabel, Chilean central bank governor Rosanna Costa and Reserve Bank of New Zealand governor Anna Breman.
Warsh’s keynote is the most closely watched session of the meeting and the only speech that will be televised live. There will be no question-and-answer session afterward. Other conference speeches will not be broadcast live, but each will include Q&A, with details expected to reach markets through media coverage.
A key uncertainty this year is that Warsh has already said he has not yet decided whether the speech will lean toward a broad macroeconomic view or follow the traditional Jackson Hole approach of offering guidance on the policy path from September through December.
Goldman Sachs said that uncertainty could leave markets more sensitive than usual to changes in language. Warsh has also said he hopes the “mountain air” of Jackson Hole will help clarify major questions, adding to attention around the policy signals he may deliver.
Goldman sees FX volatility as a likely reaction point
In a report, Goldman Sachs said Jackson Hole keynote speeches have historically had a strong tendency to amplify volatility in foreign-exchange markets. With Warsh’s policy stance still not fully defined, EUR/USD may become one of the most sensitive trading windows during the event.
At the same time, historical data show that while these speeches often increase volatility, they have not produced a stable one-way direction for the U.S. dollar.
Off-stage remarks from Fed officials may matter just as much
The article says investors should not focus only on the keynote. During the Jackson Hole meeting, major financial media outlets typically arrange side interviews with Federal Reserve officials. Those interviews begin as participants arrive on Wednesday and continue through Friday.
Goldman expects roughly five Fed officials to appear in interviews with different media organizations on Friday, with some officials possibly appearing more than once.
One detail flagged in the report is that Fed Board officials usually wait until after Warsh’s speech to give interviews, while the president of the Kansas City Fed, which hosts the event, could speak earlier, before the conference formally begins on Wednesday.
According to Goldman, because Warsh remains cautious on forward guidance, comments from other officials on the sidelines may carry a larger share of the policy-signaling burden. For investors, that means the flow of remarks across the full conference may be more informative than waiting for the keynote alone.
This year’s theme is financial innovation
This year’s Jackson Hole symposium will be held under the theme “Financial Innovation: Implications for Payments and Policy.” Based on the agenda outlined in the article, discussions are expected to center more on financial innovation and its long-term effects on monetary policy, with potential topics including artificial intelligence, digital assets and changes in financial markets.
Still, for short-term trading, the article says academic papers and conference discussion may matter less than public remarks from central bank officials. In practical terms, the market’s main watchpoints remain Warsh’s speech and any policy signals delivered by central bankers over the course of the meeting.
The article also notes that while Jackson Hole is a major annual gathering for global central banks, it is not the only special policy-communication window of the year. As the September Federal Open Market Committee meeting approaches, markets are still expected to return to incoming data on employment, inflation and economic growth, and reprice the rate path accordingly.