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Every year in August, the Federal Reserve holds a small gathering of the world’s leading economists and policymakers against the backdrop of the Grand Teton Mountains in Wyoming.
Only about 120 people attend the event every year, but the publicly-released papers and speeches — as well as media engagements by policymakers — have made the Kansas City Fed's Economic Policy Symposium a landmark event for Fed watchers and investors tuned in from afar.
The event has also become a globally significant affair, with central bank governors and heads traveling from as far as Japan to spend time at the Jackson Lake Lodge.
What happens at the symposium?
The late August event is usually three days, and begins with a dinner on Thursday. The next morning usually kicks off with a speech from the sitting Fed chair, followed by other speeches and panel discussions.
The conference is separate from the Fed’s eight, pre-scheduled policy-setting meetings, during which the Federal Open Market Committee votes to change interest rate or balance sheet policies in response to economic conditions.
But Fed chairs, aware of the heightened attention, have used speeches at the Jackson Hole meeting to provide an update on economic conditions and signal policy shifts ahead.
The heads of major central banks (i.e. the Bank of Japan, the European Central Bank, the Bank of England) are familiar faces at the events, offering opportunities to face-to-face interactions in and outside of the Jackson Hole Lodge's conference rooms.
On-site media interviews with various Fed officials add to the flurry of communication coming out of Jackson Hole, giving investors plenty of tea leaves to read on where policy could go in the future.
What has happened at previous symposiums?
Jackson Hole conferences of years past have underscored just how sensitive markets can be to the happenings in Wyoming.
In 1997, then-Fed Chairman Alan Greenspan made remarks while global markets fretted over a currency crisis in Asia. Greenspan made a brief mention of Mexico in those remarks, sending the Mexican stock market tumbling on fears the Fed chair was signaling a spillover in the global financial system.
The Fed had to clarify he was referring to the Mexican peso crisis of 1994, and not to some new emerging issue.
Politicians have also watched the event closely as well. In 2019, Fed Chairman Jerome Powell delivered a speech in the middle of then-President Donald Trump’s campaign to berate the Fed into interest rate cuts. Trump, seemingly believing the Jackson Hole meeting was a policy-setting meeting, expressed disappointment that Powell’s speech did not coincide with a decision to lower interest rates.
Trump would respond by asking whether Powell was a bigger enemy to the nation than Chinese President Xi Jinping.
Why in Jackson Hole, Wyoming?
The Federal Reserve’s outpost in Kansas City originally conceived the event in 1978 as a forum to discuss agricultural trade. But over the following years, the Kansas City Fed made efforts to broaden out the scope of the conference to general policy matters.
In 1982, the Kansas City Fed sought to pick a venue that would fish Fed Chairman Paul Volcker out of his base in Washington, D.C.
Knowing that Volcker enjoyed fly fishing, the Kansas City Fed originally sought to hold the event in Colorado, but the timing of August led them to pick a location farther north: Jackson Hole, Wyoming.
When held in-person, protestors will often travel to Jackson — known for its massive inequality gap — and organize near the lodge. Groups like the Fed Up Campaign and 350.org have called on the Fed to pay more mind to policies that impact marginalized communities and climate financing.