Top FX event for the week ahead: Jackson Hole symposium

This year’s Jackson Hole symposium, a three-day event sponsored by the Federal Reserve Bank of Kansas City, will see a host of central bankers and finance ministers giving their views on one of the most important challenges facing financial markets today – monetary policy.

How will central banks deal with low inflation and flatlining growth?

At a time when global growth is flatlining and inflation stubbornly low, market traders will want clarity on how, and when, central banks around the globe intend to tackle these problems. This event, one of the most important meetings of the year, will likely throw up market moving commentary - both official and unofficial - from some of the world’s most important financial participants and needs to be closely followed by active traders.

Back in the 2007 the symposium’s theme was ‘housing, housing finance and monetary policy’, seen at the time as a staid topic but one that proved timely as the US housing market collapsed just before the meeting started.

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This year’s meeting comes at a time when central banks around the world are either cutting interest rates, discussing cutting rates, and/or are in the process of restarting bond buying programs (quantitative easing) in order to reboot their economies. Trillions of US dollars (equivalent) of bonds have been bought up over the last decade in order to provide liquidity and boost growth, but financial markets are currently flashing recession warning signs, highlighting that loose monetary policy hasn’t worked in the past.

Will we see history repeat itself with the world’s most important central bankers and finance ministers being forced to address crashing financial markets and crumbling economies to a global audience?