The FT has an article on the changing nature of the Jackson Hole conclave at which Ms Yellen will deliver an ex cathedra proclamation tomorrow. The article details how the list of invitees does not include street economists and has returned to its roots as a place for international central bankers to gather and break bread.
Via the FT:
August 21, 2014 10:12 pm
Yellen returns Jackson Hole to wonky roots
There will be no Wall Street economists in the audience when Janet Yellen addresses the Kansas City Fed’s annual Jackson Hole conference for the first time as chair of the Federal Reserve, taking it back to its roots as a wonky occasion for international central bankers.
For many years, economists from investment banks could rub shoulders with policy makers at the conference, and their expulsion reflects growing Fed sensitivity about any perception of privileged access for financiers
Even though investors have come to expect market-moving news from Jackson Hole – the theme of the event is labour markets this year – the shift in the guest list towards policy makers highlights that the conference was never designed to communicate monetary policy and Ms Yellen may not have a blockbuster in mind this year.
Whereas the 2013 forum included Wall Street economists such as Martin Barnes of BCA Research and Jim O’Sullivan of High Frequency Economics, plus regular financial guests such as Phillipa Malmgren of Principalis Asset Management, all are absent this year.
“Some of this is an issue around the potential appearance problems of having people from major primary dealers at a conference sponsored by the Fed,” said one economist of a Wall Street bank, who was not invited this year even though he has previously attended. He said he did not want to be named because he did not “want to sound like a crybaby”.
Ethan Harris, chief economist of Bank of America, who is not attending this year, noted that there was a risk that officials could miss out on the different vantage point of the financial sector.
In their place come guests such as William Spriggs, chief economist of the AFL-CIO, the umbrella organisation for America’s union movement.
“The primary audience for the Jackson Hole economic symposium has always been central bankers,” said Diane Raley, head of public affairs for the Kansas City Fed. “This year’s symposium focuses on labour markets, and the audience composition is designed to be a complement to this important public policy discussion and debate.”
The political sensitivity of the conference for the Fed was highlighted by a group of young civil society protesters, working the hall outside the conference room, wearing green T-shirts emblazoned with the slogan “What Recovery?”
While the Jackson Hole event is the pride and joy of the Kansas City Fed, the Federal Reserve in Washington has sometimes been uncomfortable as the hoopla around the conference grows year after year.
In his later years in office, Ben Bernanke made sporadic efforts to play the conference down, giving a low key speech in 2011 and skipping it altogether in 2013.
Having chosen to attend, Ms Yellen knows that her speech will be scrutinised closely for policy signals. Recent minutes of the Fed’s July policy meeting show that it is making progress on plans for when and how to raise interest rates, but it has still not reached any decisions.
One point Ms Yellen may choose to emphasise again is that the Fed will raise interest rates earlier than planned if the economic data keeps coming in stronger than expected.
The Fed has been using steadily stronger words to try and send that message, but financial markets have paid little attention, with the ten-year bond yield close to its lowest level for a year at 2.41 per cent. That could mean Ms Yellen sounds more hawkish than markets expect.
Most of this year’s Jackson Hole attendees come from a wide range of international central banks, from Brazil to Turkey to Latvia. One last-minute absentee was Ksenia Yudaeva, the first deputy governor of the Bank of Russia, perhaps reflecting tensions over Ukraine.
Mario Draghi, president of the European Central Bank, and Haruhiko Kuroda, governor of the Bank of Japan, are attending. They will both speak at the event.