[News Terms] This Year’s 'Jackson Hole Meeting' Had No Shocks

Immediately after the conclusion of the Jackson Hole meeting, stock markets in major countries including the United States and South Korea are showing an upward trend. As of 2 PM on the 28th, the KOSPI index is recording 2,536.23, up 17.09 points from the previous trading day. Earlier, the three major indices of the U.S. New York Stock Exchange also rose simultaneously following Federal Reserve (Fed) Chair Jerome Powell's speech at Jackson Hole, alleviating concerns about the meeting.

The Jackson Hole meeting is held in Jackson Hole, a resort town in Wyoming, USA, set against the backdrop of the perennial snow-capped Teton Mountains. Its official name is the "Jackson Hole Economic Policy Symposium." Each year, central bank governors, finance ministers, Nobel laureates in economics, and economists from various countries participate. This year's Jackson Hole meeting, held from the 24th to 26th (local time), was no exception. Chair Powell, Christine Lagarde, President of the European Central Bank (ECB), and Lee Chang-yong, Governor of the Bank of Korea, attended to discuss the "structural changes in the global economy."

Federal Reserve Board Chairman Jerome Powell is taking a break immediately after his speech at Jackson Hole on the 25th (local time)
[Image source=AP Yonhap News]

The Jackson Hole meeting originally began in 1978 with meetings on U.S. agricultural topics held in Kansas City, Missouri, and other locations. It became a full-fledged academic forum on economic policy and financial markets in 1982 when then-Fed Chair Paul Volcker attended, attracting global financial market attention.

What makes this meeting particularly noteworthy is that it involves discussions on how the world's central banks should approach economic issues of the year from a policy perspective, allowing insight into the global monetary policy stance.

Major statements from central bank governors that could change the course of the global economy also emerge here. A representative example is the 2010 meeting attended by former Fed Chair Ben Bernanke, known as "Helicopter Ben." At that time, Bernanke proposed expanding quantitative easing and maintaining zero interest rates as measures to overcome the global financial crisis, which were implemented after the meeting. Earlier, in 2005, Raghuram Rajan, Governor of the Reserve Bank of India, gained attention by warning that the subprime mortgage market was excessively expanding and could lead to a crisis.

[Image source=Yonhap News]

It does not end there. Former ECB President Mario Draghi announced monetary easing policies at the 2014 Jackson Hole meeting and subsequently implemented a large-scale asset purchase program. Former Fed Chair Janet Yellen also delivered a speech in 2016 on "strengthening the rationale for interest rate hikes" and raised the benchmark interest rate four months later. Last year, Chair Powell's remarks about continuing aggressive rate hikes caused significant volatility in global financial markets. At this year's meeting, Powell hinted at the possibility of further rate increases, but since his tone was not significantly different from previous statements, global financial markets are showing a sense of relief.

The powerful messages from central bank governors at Jackson Hole, surrounded by the Teton Mountains, are so influential that the financial market sometimes refers to them as the "August Revelation of the Teton Mountains."