The symposium is titled, “Reevaluating Labor Market Dynamics,” and Fed watchers expect to hear more about the ongoing debate within the Fed on labor slack. They also say Jackson Hole may have a limited impact on markets and the release of Fed minutes two daysearlier may be even more market moving if there is any discussion of operations the Fed might use after its quantitative easing program ends.
“I think there are great expectations about what might come out of this … In recent years, Jackson Hole has been the spring board to policy changes,” said Ward McCarthy, chief financial economist at Jefferies.
In 2011, it was followed by the “Operation Twist” bond buying program, and there was quantitative easing in 2012, but he doesn’t expect the same this year, he said.
In addition to the Fed, geopolitics—particularly the tense situation in Ukraine—will hold the market’s focus, and there is a list of economic reports including CPI inflation data Tuesday. Housing data will also be important with home builders sentiment Monday, housing starts Tuesday and existing home sales Thursday. Earnings season is nearly over, so just a few big names are expected to report, including Home Depot, Lowe’s and Hewlett-Packard.
But Jackson Hole gets top billing even though it may not deliver anything new. Markets are expecting Yellen to carry a dovish message, so if she sounds in anyway hawkish, there could be a big reaction.