The Teton mountain range in the US state of Wyoming is part of the vast, rugged American Rockies. At its highest point, it rises to 4,197 metres above sea level, and overlooks the Jackson Hole Valley on its eastern side. It is here, some 2,000 metres below, that one of the world’s most important annual economic events is to be held on 22 August. For a few days, amidst the landscapes that have made the Wild West legendary, figures such as François Villeroy de Galhau, Christine Lagarde and Jerome Powell – respectively the heads of the Bank of France, the European Central Bank and the US Federal Reserve – will have plenty of time to discuss informally the state of the world economy.
Because yes, no official decision is taken during this meeting organized at the initiative of the American Federal Reserve and to which journalists do not have access. Concretely, “the central bankers exchange […] on the latest inflation data, on their respective monetary policies or even on currency movements”, detail The Echos Start. At each edition, however, there is a notable protocol event, the highly anticipated speech by Jerome Powell. A summary of the conference, each word it contains is capable of influencing or not the trends of the world economy.
In 2022, “US stocks had […] fell by more than 3% after the Fed announced that it would maintain its position on interest rates,” recalls The Echos Startand the year before, it was the S&P 500 stock index – based on the 500 large companies listed on American stock exchanges – which rose by 0.9% after the famous speech.
For the upcoming edition, the American channel Bloomberg Television, through its program Bloomberg: The Opening Tradedevoted a broadcast slot to “what traders will be watching in Jackson Hole.” For journalist Rachel Evans, “Jerome Powell is dependent on statistical data,” as evidenced by a very recent speech focused on the health of the labor market. For the journalist, it is this sector that should be in the spotlight, especially “since American inflation seems under control.”
“We are far from the circus that Davos has become”
When we talk about a gathering of thinkers, especially when it comes to economics, it is difficult not to think of the World Economic Forum, which has been held every winter since 1971 in the Swiss canton of Grisons. But unlike the latter, “we are here among serious people”, as the Challenges“We are far from the circus that Davos has become,” continues the economic magazine: at the Jackson Hole conference “we will never come across […] “The singer Bono or the actress Sharon Stone. Politicians – too often intellectually mediocre – are not welcome either.”
History also shows that the heavy artillery, which came to Wyoming to recharge its batteries, did not come to contemplate the pastures occupied by bison, elk and others. pronghorns. In 2010 – immediately after the convergence of great minds – the policy of quantitative easing which consists of “intervening massively and accommodatingly on the markets, if ‘the situation requires it’ in order to support and promote economic recovery”, explains Challenges.
Idea of a predecessor of Jerome Powell – Ben Bernanke, director of the Fed between 2006 and 2014 – the quantitative easing Emerging at a time when the United States is facing an estimated growth rate of 1.6% and an unemployment rate of around 9.5%, the crisis subprimes having been there… It was also in Jackson Hole that, in 1990, Western central bankers and their counterparts from the former USSR agreed on how to manage the fall of the communist model.