History Article
Close
This entry was posted on August 28, 2015 at 6:35.
JACKSON HOLE
The press conference is informal, on the lawn adjacent to the building that hosts the annual International Symposium of the Federal Reserve. But the Nobel Prize for Economics Joseph Stiglitz and the hundred representatives of liberal associations gathered here have a message they hope will be heard by central bankers yesterday gathered in the halls of the Jackson Lake Lodge. From the title of the initiative: Fed Up. A play on words, including the name of the Central Bank and the cry “we are fed up.” The request to the Fed, backed by a petition with 190 thousand signatures, is more precise than a tirade: that you do not raise interest rates because they are fed up with what is a recovery that, they say, still needs a lot of help. What remains uneven and marginalizes poor communities, the lower classes and middle, ethnic minorities. Flanked by another liberal economist, Brad DeLong, Stiglitz articulates the request: even modest narrow now threatening to do harm to the growth, exacerbated by tensions exploded markets. It hopes that the Fed adopt an inflation target much higher than 2% today, from 2% to 4%, to stimulate the growth, because today “there is no risk of hyperinflation and there are 11 million workers discouraged and stagnant wages. ” The ultra-accommodative Fed policy, therefore, is necessary and should rather be helped by strong stimulus on the fiscal front.
The initiative is not isolated. Has a counterpart: think tank Conservatives in turn organized a conference nearby to incite, by contrast, the Fed to change its policy soon. That accuse, dangerously distorts the free market and now only creates more financial imbalances. Rumors and controversy outside, if the Fed is not new, but this time also reflect an internecine battle. The Fed seemed ready to start a gradual normalization of monetary policy, but it is much less certain on when it really is time to snap. How really strong economic data – encouraging signs but not definitive arrived yesterday from GDP in the second quarter – and above all they can persist and weigh the volatility of financial markets and the shocks coming from the economy of China and the emerging countries.
The Symposium was to be a meeting without trauma. It is organized around an academic theme, albeit topical: the dynamics of inflation, so far disappointing for a healthy recovery. He must then serve to discuss a soft approach to the next narrow, it was in September or beyond. A choice in line with the new communication strategy of Janet Yellen: unlike predecessors Ben Bernanke and Alan Greenspan, who had used Jackson Hole to surprise investors anticipating future moves, Yellen choose to report the decisions, for transparency and clarity in the institutions. Hence his planned absence from Wyoming, along with other leading figures such as Daniel Tarullo (perhaps only half of the members of the FOMC will be in Jackson Hole).
The specter of a new crisis has instead given sudden urgency to positions around the Symposium to manage the new phase of uncertainty. There’s deputy Yellen, Stanley Fischer, and Esther George, the head of the office of Kansas City. Alongside European central bankers, Vitor Constancio to the ECB to Thomas Jordan of the National Bank of Switzerland and Mark Carney of the Bank of England, to the governors of the central institutions from Chile to India. Alongside academics and personalities, such as Jacob Frenkel, former governor of the Bank of Israel and chairman of JP Morgan Chase International.
The tone of urgency in tune statements surfaced yesterday in the words of Esther George, below whose auspices the Symposium takes place in the Teton national park: “When markets move must be especially careful, understand if it’s a sign of something deeper, or a form of adjustment. The events of the last week complicate the picture. But it is early to say that the change in a fundamental way. The standardization process, I believe, must begin as soon as possible. ” George pointed out that the Fed policy has influenced asset prices, and that some volatility was expected. A few hours before William Dudley of the New York office he had indicated that the reasons for a close in September are less solid, but had added auspicarla within the year. George and Dudley are two opposing camps within the Fed, hawks and doves. Their statements, however, are paradoxically similar. Both, like the entire symposium in Jackson Hole, must solve urgent dilemmas. Under the eyes of the markets, Stiglitz and 190 thousand signatories of its petition.
© ALL RIGHTS RESERVED
Permalink
No comments:
Post a Comment