Late every summer, a gathering of central bankers, economists, academics, and other financial luminaries takes place in Jackson Hole, Wyoming. They converge in this mountain resort town in the shadow of the Teton mountain range to discuss monetary policy, ruminate on the markets, and even do a bit of fly fishing.
Photo by makenzie cooper on Unsplash
However, the Jackson Hole Economic Symposium is more than just a retreat for economists and other money professionals. The symposium is a closely watched event that affects markets around the world.
What Is the Jackson Hole Economic Symposium?
The Jackson Hole Economic Symposium is an annual event sponsored by the Federal Reserve Bank of Kansas City. Every year, organizers choose a symposium theme that relates to an important issue currently affecting economies around the globe.
Regular attendees to the event include principal members of the Federal Reserve Board (such as Fed Reserve Chair Jerome Powell). Central bankers and policymakers from around the world also attend. Each year, the guest list also includes economists, government officials, and academics whose areas of expertise are relevant to the theme. There are roughly 120 attendees every year.
The event is held toward the end of August, beginning on Thursday and ending on Saturday.
The highlight of the Jackson Hole Symposium is the Federal Reserve chair’s keynote speech, which is given on the Friday morning of the event.
Why Is the Jackson Hole Symposium Important?
The Jackson Hole Symposium is important because it gathers together the world’s leading financial and economic officials, professionals, and thinkers. Every year, they discuss the most pressing and pertinent issues affecting worldwide economics.
It’s also an occasion on which central bankers — including Federal Reserve officials — get together to discuss monetary policies. By reading the proceedings published on the Federal Reserve of Kansas City’s website and watching the Fed chair’s keynote address, we can get a sense of the direction the Fed and other central banks may take regarding interest rates and money supply.
The History of the Symposium
The Kansas City Fed has held an annual symposium every year since 1978. Originally, the event was held in Kansas City, Missouri. However, in 1981, it was moved to Jackson Hole, Wyoming — to guarantee the attendance of then-Fed Chair Paul Volcker, a fly-fishing enthusiast. Since then, the event has been held at the Jackson Lake Lodge in Grand Teton National Park.
The Jackson Hole Symposiums’ Past Effect on the Markets
Although the Jackson Hole Symposium is important because it can give Fed watchers a glimpse into the potential monetary policy of the next 12 months, it typically doesn’t immediately impact the markets in a big way.
However, the symposium — particularly the Fed Chair’s keynote speech — tends to have a positive effect on the stock market.
For example, in 2009, then-Chair Ben Bernanke remarked in his Friday address that the global economy would suddenly spring back from the Global Financial Crisis. Of course, the eventual recovery and return to economic growth took longer than expected. But on the day of Bernanke’s speech, the S&P 500 index notched a 1.8% gain.
Bernanke’s Jackson Hole address budged the needle again in 2010 when he indicated that the Federal Reserve would ramp up its bond-buying efforts. The S&P 500 gained 1.6% on his remarks.
However, the markets don’t always respond optimistically to the event. In 2022, the S&P 500 dropped by 3.4% following a speech by current Fed Chair Jerome Powell that warned about the potential pain households could feel as the central bank battled inflation.
What Happened at the 2024 Symposium?
This year’s event was held on August 22 to 24, 2024. The theme was “Reassessing the Effectiveness and Transmission of Monetary Policy.”
At this year’s Fed Jackson Hole Symposium, Powell noted in his address that the Federal Reserve would soon reduce its benchmark interest rate. Stocks rose on the news. The S&P 500 surged by 1.15%, while the Dow Jones Industrial Average added roughly 460 points.
The price of gold also rose following Powell’s Jackson Hole Symposium speech. On the day of the address, the spot price for gold rose 0.94% to close at $2,511.01.
The increase in the gold price was tied to the anticipation of lower interest rates, which drove investors away from interest-paying assets such as bonds.
Gold and other precious metals also have a long history of being safe havens during times of economic uncertainty, which was certainly on the discussion agenda this year.
Between the Federal Reserve’s interest rate cuts, the presidential election, and conflicts in the Middle East and Eastern Europe, 2024 will likely contain more economic uncertainty before it ends. Investments in gold and silver can help you protect and even grow your wealth.
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