US economy under spotlight at muster

Flashes of illumination rather than fireworks are expected at this week’s annual meeting of top central bankers and economists in Jackson Hole, Wyoming.

US economy under spotlight at muster

Few predict anything so momentous as the speech by Federal Reserve chairman Ben Bernanke two years ago that paved the way for an unprecedented $85 billion per month stimulus plan.

But policymakers will discuss at length their thinking around the labour markets of major economies at the August 21-23 meeting, perhaps dropping clues about the path for monetary policy in the months ahead.

The spotlight will be on Janet Yellen, who will speak on Friday in her first appearance at Jackson Hole as Fed chair.

“I don’t think she’s going to go anywhere close to monetary policy,” said Stephen Lewis, chief economist at ADM Investor Services.

“The theme of the meeting is going to be dynamics of the labour market, which is a subject very close to her heart, and it is a key question for the Fed as it tries to work out what its policy should be over the next few months.”

Mr Lewis said he expected a speech similar to one given by Mr Bernanke in March 2012, when he outlined what he thought of the various indicators of the labour market.

Other speakers include Bank of Japan Governor Haruhiko Kuroda, Central Bank of Brazil governor Alexandre Antonio Tombini and Bank of England deputy governor Ben Broadbent.

Further policy hints might also come in the form of minutes from the Fed and BoE’s last monetary policy meetings.

“We look for new clues on how the Fed plans to gain greater control of the Fed funds rate” said Victoria Clarke, economist at Investec.

The BoE minutes will be examined for concrete signs of dissent among members of the Monetary Policy Committee, after the bank last week seemed to push back the prospect of a rate hike this year.

- Reuters

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