Economist's Insights

Jackson Hole Opening Acts Offer Little Excitement

Aug 24, 2017

In an opening act for Friday’s main event featuring Fed Chair Yellen and ECB President Draghi, Fed Bank Presidents Kaplan and Mester made comments from Jackson Hole on Thursday. Kaplan reiterated his call for patience (on inflation) before hiking again, restated his support for 2017 balance sheet normalization, and echoed his previous pondering that the neutral rate may have a 2% handle. He did weigh in on the topic of NAFTA saying it should be reviewed, not scrapped, and indicating concerns around trade disruptions with our border neighbors. Mester seemed less concerned about the recent weakness in inflation. She said that the Fed “should continue with the gradual rate path,” because “Inflation is running close enough to 2 percent in my view that it allows a gradual approach.”