Following the publication of economic data that allayed fears of a sudden slowdown in the US economy last week, the world’s leading central bankers, mainly the United States, the Eurozone, Japan and England, will gather in the final stretch of this week at the annual meeting in Jackson Hole, United States, where they will construct a discourse in favor of a relaxation of monetary policy; that is, the reduction of interest rates that determine the cost of credit with which companies and individuals finance themselves.
According to economic specialists, inflation is declining, the data benigno
of the US consumer price index (CPI) and growth is slowing, indicate that there will be gradual interest rate cuts.
Christian Keller, head of economic research at Barclays, said inflation was no longer the threat it once was.
While it may be too early to declare victory, and central bankers will certainly be cautious to avoid this in their official rhetoric, the inflation scare that had dominated the policy debate since prices began to soar during the pandemic has now largely disappeared. Inflation may not be at the 2 percent target yet in the United States, but it is close and heading in the right direction.
Keller said.
Monetary Guide
Jerome Powell, president of the Federal Reserve (Fed), will open the Jackson Hole summit with a speech on the environment and the conduct of monetary policy, said Alejandra Marcos, director of analysis at Intercam.
This year, the theme of the meeting is Reassessing the effectiveness and transmission of monetary policy
(Reassessing the Effectiveness and Transmission of Monetary Policy).
In this speech, Powell is expected to offer guidance on the monetary stance for the coming months.
Marcos predicts.
The minutes of the Federal Reserve’s monetary policy meeting held on July 31 will also be released.
Wall Street closed last Friday with its best week of the year, with the Nasdaq up 5.2 percent, thanks to the latest data on inflation, employment and consumption in the United States, which dispelled the spectre of recession.
Analysts agree that falling interest rates and a slight economic slowdown favor risk assets.
This week, attention is focused on the annual meeting of central bankers in Jackson Hole, which will be held on Thursday and Saturday, and economic agents expect it to strike a constructive tone and hint at rate cuts after the summer.
Warning signs
Chicago Fed President Austan Goolsbee said Sunday that U.S. credit conditions are tight and getting tighter, and that while there is no certainty that the Fed will cut interest rates next month, failure to do so could hurt the job market.
When you set a high rate like we have and keep it there while inflation falls, you are actually tightening
Goolsbee told CBS.
The economic data is a mix of positive indicators and some more worrying ones, he said, but If you maintain the adjustment for too long, you will have a problem on the employment side.
.
Just on Friday Goolsbee had warned about that There are some things that are raising red flags
in the US economy.
When we see weakness beginning to appear in the labor market, I think we need to pay attention.
Goolsbee said at a quarterly meeting of Angels Investors.
With information from Reuters