What You Need To Know About The Annual Jackson Hole Symposium

The highlight of the economic calendar of the week is the annual Jackson Hole Economic Policy Symposium to be held on Friday and Saturday. Though the symposium as such, is not a market moving event, there is a lot of excitement generated around it, given the pedigree of the attendees and kind of topics being thrashed out.

What is special about the gathering? What should an investor know about it?

The Guests And The Host

The symposium is a routine event organized annually by the Kansas City Federal Reserve. It was held for the first time in 1978, although it moved to its current location of Jackson Hole, Wyoming, only in 1982.

The first symposium was held in Kansas City, Missouri, and discussed "World Agricultural Trade: The Potential for Growth."

An interesting story circulated concerning how the conference gained in popularity is that the then Fed Chair Paul Volcker, an avid fishing enthusiast, was baited into attending the conference in 1982 by the recreational prospect of fishing offered by Jackson Hole.

Volcker, with his clout and connection, pulled in many of his central banking peers, academics and policymakers. Thus, the Jackson Hole conference continued to be patronized by the high and mighty belonging to the world of money and finance.

Panel discussions and papers presented at the conference each year are based on a theme.

Among the attendees are the heads of major central banks from both emerging and developed economies, chief executives of banks, finance ministers, U.S. government representatives and academics.

Press attendance is limited, just so that they do not influence the proceedings. Unlike the other conferences, the Jackson Hole symposium charges even the members of the news media.

The composition of the attendees has changed over the years, according the Economists. Wall Street economists attending the conference dwindled from 27 percent of the attendees in 1982 to merely 3 percent in 2013. At the same time, foreign central bankers comprised 31 percent of the attendees in 2013 compared to 3 percent in 1982. Press participation has increased over the years, from 6 percent of the attendees in 1982 to 12 percent in 2013.

Agenda Of The Conference

At the conference, the spotlight is on economic issues facing the U.S. and the world at large. This apart, the participants discuss the implications and policy options pertaining to the symposium topic, according to the Kansas City Federal Reserve.

The proceedings of the conference include papers, commentary and discussion.

See also: Wide-Spanning Market Implications When Fed Changes Its Tone

Does The Conference Move Markets?

This conference, despite its wide appeal, has not been a major market mover in the past, either Friday, the day when the meeting gets started, or Monday, following the conclusion of the symposium.

Taking the S&P 500 as a proxy, the market has gained on two Friday, when the meeting starts in earnest. Meanwhile, the market retreated the remaining three Fridays. However, the gains or losses were only modest, except in 2016, when the index was 0.78 percent higher.

Meanwhile, on the Monday following the conclusion of the Jackson Hole symposium, the market was higher on three Mondays but declined the remaining two Mondays. The gains/losses Mondays are substantial, and by degree, it amounts to moderate increases/declines.

What's In Store This Year?

The 2017 conference is scheduled from August 25 to 26, with the event set to commence Friday morning and wind up with a lunch Saturday evening. Additionally, there would be an opening reception and dinner Thursday evening. The current year's theme is "Fostering a Dynamic Global Economy."

Prominent among those planning to attend the symposium include European Central Bank Governor Mario Draghi, who would be part of the show after a two-year hiatus.

Given that the bank's next monetary policy setting meeting is scheduled for Sept. 7, there is a widespread belief that Draghi may use the platform to prepare the markets for tightening of monetary policy, according to South China Morning Post.

Meanwhile, our very own Janet Yellen, the Fed Chair, is slated to speak on Friday. Yellen confirmed her attendance only last Thursday. Some believe Yellen might use the symposium to express freely her thoughts, given that her term expires early next year.

However, the very fact that Yellen has opted to attend the conference shows her confidence in getting reappointed.

"While this year's symposium offers central bankers a platform to break with the recent past in laying the ground for less generous monetary policy, it may also be a watershed event in the changing of the guard in central banking," the Financial Times said of the symposium.

Future And Fishing

It is a time split between discussing future economic policy issues and an informal gathering of stress-bursting fly-fishing trip down the Jackson Hole water strips. On any given day, an unexpected announcement concerning the future course of monetary policy a central bank is planning to pursue has the potential to sway the markets. Though in the past five years, the market showed muted reaction, it does not mean that it is always going to rank down in its market moving ability despite the prestige, glamor and exclusivity associated with it.