In addition to the introductory speech by ECB president Mario Draghi at the tomorrow’s economic congress in Lindau, the focus will also be on the international central bank symposium that takes place from 24 to 26 August in the US town of Jackson Hole.
Jackson Hole is a meeting during which central bankers, finance ministers and academics discuss global economic issues and analyze the possibilities of how those issues could be resolved. Furthermore, there are often clear indications from the central bankers of how the central bank policy will develop further. This time, however, it seems that the hopes on the symposium have been set too high. The speech by Janet Yellen will concern obviously the achievement or non-achievement of the inflation target, the growing risks on the financial markets and the importance of the regulations. But those issues are being addressed on a regular basis – as noted also in the FOMC meeting minutes from July. Nevertheless, the market expects new indications on when and to what extend the FED will initiate a reduction of the bloated balance sheets and when the next interest rate move might come. The same also applies to Mario Draghi who will give a speech at both the economic congress in Lindau and the symposium in Jackson Hole. The market hopes for indications from the ECB president on whether the European Central Bank already has definite plans to finish the Asset Purchase Program according to schedule and initiate an interest rate hike. However, whether the two central bank chiefs will do this favor for the market, remains doubtful. A more likely scenario is that the news will be actually made known at the respective regular central bank meeting. The next ECB meeting takes place on September 7, the next FED meeting on September 20.