Amid Weak Global Inflation, The Fed’s Annual Economic Symposium At Jackson Hole Will Draw Attention

Investors will pay attention later this week to the Federal Reserve’s annual economic symposium at Jackson Hole, Wyoming where central bankers and economists from around the world will converge and discuss the global economy.

This year’s economic symposium is called, “Fostering a Dynamic Global Economy” and takes place from August 24-27th with Fed Chairwoman Janet Yellen providing a keynote speech on Friday.

Reuters reported on August 16th that ECB President Mario Draghi won’t be giving any major policy message at the Jackson Hole symposium which lowers expectations the European central bank will soon begin telegraphing the course of its monthly €60 billion quantitative easing program consisting of asset purchases that is expected to remain in place until the end of 2017 and stay intact “until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2 percent over the medium term.”

Weak global inflation that has come under pressure due in part to retreating crude oil prices in recent months which has caused central bankers to reexamine monetary policies that includes scaling back asset purchases and monetary policy tightening.

Euro area inflation was 1.3 percent in July 2017, matching the same level in June.

The U.S. Federal Reserve’s main inflation gauge, Personal Consumer Expenditures (PCE) index fell further away from the Fed’s 2 percent inflation objective and below 1.5 percent in June to 1.42 percent with its headline number and 1.5 percent with Core PCE, which excludes food and energy.

According to the Fed’s minutes from their July policy meeting, the staff’s economic outlook concerning inflation  includes a forecast for consumer price inflation, as measured by the change in the PCE index, that was revised lower for 2017 in response to the soft incoming data for inflation.

Consequently, inflation in 2017 is expected to be similar in scope to the magnitude of inflation in 2016, “with an upturn in the prices for food and non-energy imports offset by a slower increase in core PCE prices and weaker energy prices.”

Written and Edited By:

Johnathan Schweitzer






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