Federal Reserve System Chair Jay Powell speaks on Thursday at the (virtual) Jackson Hole symposium.
- Thursday 27 August 2020
- at 9.10am NY time (1310GMT)
He is set to speak on (title of the speech) “Monetary Policy Framework Review”.
The 'profoundly consequential' tag is an assessment made by an anlayst in the US in this piece here at Market Watch: Powell set to deliver 'profoundly consequential' speech, changing how the Fed views inflation
The main points:
- Powell will outline what could be the central bank’s most active efforts ever to spur inflation “Monetary Policy Framework Review” wraps up a yearlong examination on what policy should look like in the future
- “This is probably a historic speech”
- Powell is likely to use is “average inflation” targeting, it means that the Fed, which has pegged 2% as a healthy level, will let inflation run higher than that for a while if it has spent a considerable time beneath that level.
Hmmm. OK then. I am a bit underwhelmed on this. The RBA, for example, has their inflation target over the course of a cycle, that is they'll let it stay above target for a time if they see it coming down in future (in a nutshell explanation). (BTW, inflation in Australia, as with nearly everywhere else, is way below target at presnt).
Where to for the USD if Powell hits his 'average inflation' button? Lower, see here for reasoning .
A good luck kiss from Mrs. P!
