Jackson Hole

Investors are preparing for the Federal Reserve to reaffirm its pledge to crush inflation during this week’s annual central bank summit in Jackson Hole, Wyoming. They anticipate that Fed chair Jerome Powell will offer a strong tightening message, dashing chances for a rate decrease in 2019.

This week’s retreat in Jackson Hole, Wyoming, follows investors’ interpretation of the Fed’s July meeting transcripts as dovish and a go-ahead to resume risk-taking. In the short term, markets adhered to that interpretation, as seen by stable stock prices and bond yields. Last week, traders got the transcripts of the Federal Reserve’s July meeting. They showed a bearish bias and a green light to take on more risk, which led to the Jackson Hole retreat.

Jackson Hole Economic Conference

Jackson Hole, Wyoming, is one of the country’s most well-known ski resorts. However, the 48-mile-long valley has received attention for reasons unrelated to mountain climbing. On Friday, the Federal Reserve Bank of Kansas City will host an economic conference in Jackson Hole.

The Federal Reserve Chairman, Jerome Powell, will deliver a speech there. It is a three-day gathering of economic experts from government and academia and many central bankers from around the world. The first event was held in Missouri in 1978. At the event, approximately 120 economists, investors, government officials, and media representatives discuss fiscal policy.

What Worries Investors?

The upcoming Jackson Hole economic conference, which begins on August 25, may also cause concern among investors. Investors are concerned that Powell will go further in explaining the Fed’s aggressive stance and future interest rate increases.

Powell’s remarks may set the tone for the market until the Federal Open Market Committee meets later this month. This triggers the risk-off sentiment, causing investors to shift their investments away from risky assets and toward safe-haven assets. Perhaps that’s the reason institutional investors have avoided the crypto markets.

Weekly volumes for crypto investment products reached $1 billion, according to Coinshares data, which is 55% less than the yearly average. Furthermore, the price movement in Bitcoin, altcoins, and equities reflects investors’ concerns about the Federal Reserve’s rate hike intentions and the waning strength of the bear market rally.

Why is Friday’s Powell Speech Pivotal?

Jackson Hole Economic Conference has gained prominence because it provides a forum for policymakers to discuss pressing economic issues. It also provides a venue for people to make major announcements or spread the word about major projects.

Fed Chair Jerome H. Powell used his Jackson Hole speech two years ago to declare that the Fed had a new model for determining how and when to raise interest rates. He said that the Fed would no longer do so because unemployment was low and inflation was rising. He explained the causes of inflation at the time, which could have been a temporary issue.

Following the epidemic, it resulted in the reopening of the global economy. Powell could repeat his remarks from the July Fed meeting, stating that the central bank would become more reliant on data in the future. Investors would be taken aback by the dovish surprise.

As a result, Powell’s speech may cause cryptocurrency to rise or fall in value. Experts believe that cryptocurrencies will rise if Jerome Powell delivers a detailed speech at the Jackson Hole conference.

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