Some of the world’s most powerful bankers and economic thinkers will spend the next three days holed up at Jackson Lake Lodge, as they do each summer for the Federal Reserve Bank of Kansas City’s annual symposium.
But this year, the Tetons aren’t the only thing looming over the much-anticipated conference on monetary policy. The event comes amid slowing global growth, uncertainty around President Trump’s trade war with China, the president’s ongoing attacks on Fed policy, and growing worry over the prospect of an economic downturn.
Friday morning at 8, Federal Reserve Chair Jerome Powell is scheduled to give his first public comments since the July meeting where central bankers voted to lower interest rates for the first time since the Great Recession.
In the weeks since the meeting, speculation has flown over whether the move signaled the first in a series of rate cuts, or simply the “mid-cycle adjustment” that Powell deemed it in a speech at the meeting.
Some experts have argued that the Fed needs to continue lowering rates to avoid another recession, and Trump has relentlessly called for more aggressive cuts. He has attacked Powell on Twitter in the days leading up to the conference, calling him a “golfer who can’t putt, has no touch.” Investors appear to be expecting further cuts as well.
Adding to the economic anxiety, the yield curve — a measure of the relative interest rates for short- and long-term government bonds — briefly inverted last week, which means people are abandoning risky short-term investments and looking to safer long-term ones. An inverted yield curve has preceded every recession in the last 60 years.
But some Fed officials have pointed to the strong job market and low unemployment as an indication that drastic cuts may be premature. Minutes from the July meeting show that “several” voting members opposed lowering rates, and that officials chose to remain decisively indecisive, agreeing it was “important to maintain optionality.”
During Powell’s speech, said Jonathan Schechter, a Jackson Town Councilor and economist, “what Fed watchers will be doing is listening for his longer-term strategic view, and how is he going about thinking about this.”
“What he says will probably be very oblique,” Schechter added, noting that Trump’s unpredictable approach to fiscal policy requires flexibility on the Fed’s part. “That’s just what he [Powell] has to do in order to do his job.”
The Federal Reserve Bank of Kansas City, one of the 12 Fed districts spread across the country, has hosted a symposium every year since 1978. It took place in different locations the first few years, but since 1982 it has fallen in late August at Jackson Lake Lodge.
The location was initially chosen to lure then-Fed Chair Paul Volcker — an ardent fly-fisherman — and the tradition stuck. Now about 120 people attend, including economists, U.S. government representatives, financial market players and central bankers from more than 40 countries. The conference is not open to the public.
“The Bank takes pride in the symposium’s 40-year history,” a Fed news release states. “The event is known as one of the longest-standing central banking conferences.”
Though the participants aren’t known for their sensational speeches or flashy demeanor, their retreats in Jackson Hole have become a hub of economic debate, and sometimes the source of announcements with major repercussions for the global economy.
“These people are kind of dry and the subjects are kind of dry, and the conversation can be kind of dull,” Schechter said. But even if the talk is esoteric, “over time it has emerged as the single most important financial forum.”