The Jackson hole symposium — “Structural Shifts in Global Economy” is being held from 24th Aug to 26th Aug, 2023. Concluding each summer, a multitude of central bankers, policymakers, scholars, and economists hailing from across the globe assemble for a three-day event at Jackson Hole, Wyoming. During this gathering, they engage in comprehensive dialogues regarding economic matters, consequences, and potential policy courses aligned with the annual theme of the symposium.
Fed Chair Jerome Powell has acknowledged that the inflation has come down from its peak of 9.1% in June, 2022 and the continued downward trajectory is a welcome development, however it has been made clear that it still remains well above accepted level of tolerance and Fed is resolved and ‘prepared’ to raise benchmark interest rates futher if required and deemed appropriate and intend to hold monetory policy at restrictive level until Fed is confident that inflation is moving sustainably down towards the objective.
Food and Energy prices are dictated and influenced by global factors and hence it becomes difficult to forecast the headline inflation trend with complete certainity. In addition to headling inflation, the future decisions will be dependant upon the data it receives on three broad categories of core PCE inflation namely — Goods, Housing Services and all other services sometimes referred to as non-housing services. Fed chair mentioned that they are navigating by stars under the cloudy sky as doing too little can cause inflation to become entrenched in the economy which would be harder to remove without even more pain to the households eventually and doing too much could cause unnecessary damage to the economy.
ECB president Christine Lagarde also re-iterated her stance and stated that interest rates in European Union need to remain high as long as necessary to calm the raging inflation in the European Union which is substantially higher than historical norms as well as from that of US.