Secular stagnation and next recession likely to weigh in Jackson Hole

Federal Reserve policymakers, finance ministers, and central bankers around the world will meet in the mountain resort of Jackson Hole to attend the economic policy symposium organized by Kansas City Federal Reserve. The topic looks into the future and tries to address the biggest issue in the monetary policy today; “Designing Resilient Monetary Policy Frameworks for the Future”.

The following issues are likely to dominate the symposium;

• What next?

Even after so much of monetary easing, achieving sustainable inflation remains a dream. So the question that is likely to keep haunting is the above. Expect discussions over next level of easing, “the helicopter money”.

• Reforms?

San Francisco Fed President John Williams suggested a change in approach towards inflation, probably higher target around 3 percent. Same has been suggested at Bank of Japan (BoJ) too.

• How to prevent next recession and how to act?

This is one of the biggest concerns right now. Rates are already at the low and in some cases in the negative. So what tools the central banks have to tackle any upcoming recession.

• Secular Stagnation?

This theory is popularized by former treasury secretary Larry Summers and recently been a topic of discussion in the FOMC after years of denial that the U.S. economy is in such a state. FOMC member Powell indicated that he is increasingly worried about it.

The symposium begins on Thursday and you can expect lots of volatility over the speeches from notable dignitaries.