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The Federal Reserve Bank of Kansas City\u2019s annual economic symposium in Jackson Hole, Wyoming is winding down.\u00a0<\/p>\n
Here are some of the key takeaways from the conference:<\/p>\n
Fed Chair Jerome Powell\u2019s widely anticipated speech affirmed expectations for an interest-rate cut at the central bank\u2019s next gathering on Sept. 17-18,\u00a0bolstering stock prices<\/a>\u00a0and Treasuries.\u00a0<\/p>\n \u201cThe time has come for policy to adjust,\u201d Powell said Friday. \u201cThe direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.\u201d\u00a0<\/p>\n Powell said he has more confidence inflation is on a path to the Fed\u2019s 2% goal, while acknowledging there\u2019s been an \u201cunmistakable\u201d cooling in the labor market. \u201cWe do not seek or welcome further cooling in labor market conditions,\u201d he said.<\/p>\n While Powell offered little detail about how the Fed might proceed on borrowing costs after its September gathering, he did emphasize the need to focus on lessons learned in the central bank\u2019s upcoming framework review.<\/p>\n Powell wasn\u2019t the only central banker to signal interest rates are on a firm path downward.\u00a0<\/p>\n Bank of England Governor Andrew Bailey said Friday that while it\u2019s \u201ctoo early to declare victory\u201d over inflation, the risks of persistent price pressures appear to be receding. The UK central bank lowered its benchmark interest rate earlier this month, and his comments suggested he\u2019s growing\u00a0more confident<\/a>\u00a0about further rate cuts.<\/p>\n Meanwhile, several members of the European Central Bank\u2019s Governing Council present at the conference said they would support another reduction in interest rates next month. That group included Finland\u2019s Olli Rehn, Latvia\u2019s Martins Kazaks, Croatia\u2019s Boris Vujcic and Portugal\u2019s Mario Centeno.<\/p>\n The ECB\u00a0lowered<\/a>\u00a0borrowing costs in June. Centeno called a decision to ease in less than three weeks \u201ceasy,\u201d given the data on inflation and growth.<\/p>\n On the sidelines of the conference, a series of Fed officials offered updated views on the economy and hints at the path ahead.\u00a0<\/p>\n Philadelphia Fed President Patrick Harker said rate cuts should be \u201cmethodical<\/a>.\u201d He agreed it\u2019s time to lower interest rates, adding, \u201cJust start the process and keep it moving.\u201d<\/p>\n Boston\u2019s Susan Collins expressed a similar sentiment Thursday, noting \u201ca gradual, methodical pace\u201d of cuts is likely to be appropriate.<\/p>\n At its core, the three-day conference is academic in nature. Economists presented four research papers all related to the theme of \u201cReassessing the Effectiveness and Transmission of Monetary Policy.\u201d<\/p>\n Perhaps most relevant to the current economic moment \u2014 given the increasing focus on employment \u2014 was research by Pierpaolo Benigno of the University of Bern and Brown University professor Gauti Eggertsson. They concluded that cooling in the labor market is approaching an inflection point, where additional slowing could bring a much larger increase in the US unemployment rate.\u00a0<\/p>\n In a panel discussion Saturday with Brazil\u2019s Roberto Campos Neto and Norges Bank\u2019s Ida Wolden Bache, the ECB Chief Economist Philip Lane said the return to 2% inflation is \u201cnot yet secure<\/a>.\u201d Campos Neto, meanwhile, said a\u00a0tight labor market<\/a>\u00a0has made the task of taming inflation a challenge.<\/p>\n<\/div>\nInternational View<\/h3>\n
Path Forward<\/h3>\n
Papers and Panels<\/h3>\n
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