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

In Short

Expectations are high about the speech Chair Powell will deliver on Friday evening at the annual Jackson Hole Economic Policy conference. However, we think that those expecting clear communication about the shape and timing of the tapering of asset purchases may be disappointed.
Market Commentary

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

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