The week ahead is all about the US Federal Reserve as central bankers from all around the world meet at Jackson Hole, Wyoming, for an annual summit starting Thursday, and minutes of the US Fed’s meeting at the end of July are released on Wednesday.
Investors will examine every word in the Fed minutes and every word spoken at the annual Jackson Hole summit for any clues on the timing of interest rate rises as the US central bank moves toward lifting rates back to normal levels after more than five years of keeping them unusually low to help the economy recover.
There are earnings from Home Depot on Tuesday, Hewlett-Packard, Staples, Lowe’s and Target on Wednesday, and Gap and Salesforce.com on Thursday, but the Fed is really the focus in the coming week.
The theme for Federal Reserve Bank of Kansas City’s annual economic conference in Jackson Hole is “Re-Evaluating Labor Market Dynamics,” with Fed chair Janet Yellen delivering the keynote speech on Friday.
Given the theme for the meeting, analysts are not expecting anything as dramatic as two years ago when then Fed chairman Ben Bernanke readied markets for the Fed’s dramatic $85 billion a month purchases of Treasury and mortgage bonds to create artificial demand for US debt and help keep rates low.
Yellen will speak on Friday in her first appearance at Jackson Hole as Federal Reserve chair. "I don't think she's going to go anywhere close to monetary policy," Stephen Lewis, chief economist at ADM Investor Services, told Reuters.
That won’t stop the market trying to interpret anything said at Jackson Hole by Yellen or anyone else.
Other speakers at Jackson Hole are expected to include Bank of England Deputy Governor Ben Broadbent, Bank of Japan Governor Haruhiko Kuroda, and Central Bank of Brazil Governor Alexandre Antonio Tombini.
