What to expect from Jackson Hole: little news on tapering, more details on the policy framework

Highlights:

• Despite the strong expectations, Fed Chair Powell’s speech at the Jackson Hole conference will likely be short on details on tapering the Fed’s asset purchases amid persistent risk from rising Covid cases and economic uncertainties persist.
• If the Delta variant does not prove too harmful, we expect a clear warning on imminent tapering in September, an announcement in November, followed by an implementation in December.
• Powell is likely to take the opportunity for further clarifying some key aspects of the Fed policy, especially stressing the distinction between asset purchase tapering and rate hikes.

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