United States

Fed’s Jackson Hole symposium takes spotlight amid market turmoil

WEEKLY MARKET COMMENTARY  | 

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The Federal Reserve will gather for its annual symposium in Jackson Hole, Wyoming against a backdrop of turmoil in global financial markets. The topic of the conference is "Inflation Dynamics and Monetary Policy," which should provide plenty of fodder for market participants ahead of the central bank's September meeting where it is possible the Fed will raise interest rates. The most closely watched speeches at the Jackson Hole symposium will be talks given by the Bank of England's Mark Carney and Fed Vice Chair Stanley Fischer.

It is becoming clear that the Chinese economy is experiencing a secular slowdown that will likely be accompanied by further devaluation of the yuan. The 12-month non-deliverable forward market is pricing in at least a 3 percent deprecation of China's currency during the next year. The depreciation will likely be accompanied by much more robust action from Chinese fiscal and monetary authorities to avoid a hard landing for the economy, which is still reeling from overinvestment in housing, commercial real estate and manufacturing.

The U.S. economic data schedule this week will feature fresh reports on housing, durable goods orders, inflation and consumer sentiment, in addition to the second estimate of growth for the second quarter.

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