The Importance of Jackson Hole

Jackson Hole is a rustic mountain town in Wyoming. It is a place where the Federal Reserve (Fed) hosts an annual symposium for central bankers, policymakers and economists.

- WILSON SY

Investors pay close attention to this event because central bankers typically provide a clear policy roadmap and explain important programs that they would pursue. These statements could have major implications on the movement of various asset classes such as equities, bonds and currencies. On Aug. 22, Fed Chair Jerome Powell delivered a dovish speech that pushed the S&P 500 and Dow Jones to new all-time highs.

Historic speeches made in Jackson Hole
Over the years, the heads of the Fed delivered speeches in Jackson Hole that drove the movement of major asset classes for several years. Below are some examples of this:

1. In August 2010, former Fed chair Ben Bernanke indicated that the Fed was ready to provide additional monetary stimulus to support the economic recovery. This led to the announcement of the second phase of quantitative easing (QE2) in November 2010.

2. In August 2016, former Fed chair Janet Yellen remarked that the US economy was strong enough to handle a gradual rate hiking cycle (see Is the waiting game over?, Aug. 29, 2016). Her speech ushered a two-year hiking cycle which raised the Fed funds rate by 200bps.

3. In August 2024, Powell said that the time had come for the Fed to adjust its policy (see The time has come, Sept. 2, 2024). This was followed by a cumulative policy rate reduction of 100bps over the next four months.

Powell's recent speech