The central bankers of the world will be meeting in Jackson Hole for the symposium starting today. Investors will keenly watch for Powell's speech on Friday, August 27, where he is expected to provide details on tapering back on the Fed's massive quantitative easing, its massive stimulus.
Many analysts expect Powell to speak about inflation and taper tampering but Brian Jacobsen of Wells Fargo Asset Management believes Powell might not want to create turbulence for the market.
“It is probably a very important speech, but not necessarily all that important for the markets. I am expecting that chair Powell is going to try to make the speech almost as boring as he can for the financial markets because he does not want to create any sort of turbulence,” Jacobsen said.
Jackson Hole Economic Symposium: Place where central bankers meet; here's why global investors are interested
According to him, Powell might focus on how monetary policy can combat factors such as inequality. “The topic of the broader conference is really about monetary policy and an uneven economic recovery. Therefore, given that broader theme of the conference, we do not know exactly what he's going to talk about, but I suspect it's going to be something along the lines of inequality, and perhaps how it is that monetary policy can play a role in combating some of the problems of inequality,” said Jacobsen.
On the taper announcement, he said people will try to read into statements on when taper could take place. “People are going to try to read into his statements about when the Fed might announce a tapering. So, even if he does not come right out and say it, I think that maybe some of it will be implied because we know that the Federal Reserve, in terms of their mandate for stable prices, and full employment, they have really said that the full employment part of their mandate is supposed to be more inclusive -- that is, it is not just looking at the headline, unemployment rate, but it's looking at maybe the unemployment rate or underemployment for minorities and different various demographic groups,” said Jacobsen.
For the entire interview, watch the video