Jackson Hole in Wyoming is for money people what Wembley is for football fans: This is where things are decided – and this week it’s that time again. And everyone will feel it.
If a really bad crime happened between the Mississippi and the Pacific coast, then – as the New York Times knew – there was only one safe place for the perpetrator in the 19th century to hide: Jackson Hole, Wyoming. The rugged Teton Mountains rise on the horizon, and below lies the prairie with the Snake River. You can’t really get any further away. That was the case in the Wild West, and it’s very similar today. Only it’s no longer criminals who come to the valley, but people who have a say in the well-being of the global economy.
Waiting for interest rate signals from Jackson Hole
For days, the stock exchanges in New York, London and Frankfurt have been waiting anxiously for “Jackson Hole”. That is the code word for a three-day conference and a speech by the President of the American central bank, the Fed, Jeremy Powell. On Friday, he will explain to the world what he thinks about interest rate cuts, when they might come and whether US monetary policy should now focus more on reducing unemployment or inflation.
That sounds a little absurd. But how interest rates develop not only determines how high share prices are, but also how much real estate loans cost, what life insurance can pay out and which investments in factories – and thus jobs – are worthwhile. On Blooomberg TV, where all the stock market professionals are watching, a man in a checked shirt and cowboy hat is already standing in front of the spectacular mountain backdrop in the Rocky Mountains.
Horseback riding, fly fishing, navigating markets
The meeting takes place in the Jackson Lake Lodge, which is located on a lake about 50 kilometers from the main town of Jackson. You can go fly fishing there, and of course horseback riding too. And you can shake up the world with a few words. Central bankers are often rational number crunchers who think a lot about economic theory and how the actions of central banks – interest rates up, interest rates down, buying securities or not – affect the real economy. When they have finished thinking, they usually express themselves in both-and statements, which are then analyzed by professionals in the financial industry. Does the both prevail? Or the also? And then these statements move incredible amounts of billions of dollars, euros and pounds.
An invitation to Jackson Hole is at least as great for an investment banker or fund manager as a Taylor Swift card is for his children. Just 120 people are invited every year, including dozens of central bankers and a handful of government officials. They have little say here. At least so far. Kamala Harris, the Democratic presidential candidate, has always maintained that decisions about monetary policy should not be made by the government, but by independent central banks.
But Donald Trump, who once brought Powell into office as US president, sees things differently. “I made a lot of money, I was very successful,” he said at the beginning of the month. As president, he wanted to have a say when interest rates were decided. It sounded as if clouds would also be gathering in the mountains of Wyoming if he won.
Source: Stern
