Jackson Hole: Where Fed Policy Is Decided on the Fly

With the Federal Reserve now committed to making monetary policy decisions on the fly, this year’s in Jackson’s Hole may matter more than ever. All eyes are on this resort in the Grand Teton mountains, where the  polyester vests are multiple, double entendres about “bears” are funny, and there are a surprising amount of Coin Boys dressing up like cowboys.

How exactly did a bucolic hotel situated 34 miles off from Jackson, Wyoming become the site of the “world’s most exclusive economic get-together?” New York Times fed whisperer Jeanna Smialek writes, it’s simply where news is made.And you get on the Federal Reserve Bank of Kansas City’s uber selective guest list, you know you’ve made it monetarily-speaking.

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It’s where, every year since he’s stepped up as Chairman of the Federal Reserve, Jerome Powell has directed the flows of the U.S. economy. The thing is, he doesn’t even need to get it right. Last year he predicted glum and gloom and the U.S. got job growth and slowed inflation. This year, he said almost exactly what was predicted.

The economy has been growing faster than expected. More rate hikes may be needed. The Fed is determined to get inflation down to its longstanding target of 2%.

All that pageantry, all that caviar flown into the woods of Wyoming, for this? Well things aren’t all that simple. The Fed’s policy and outlook is essentially unchanged, but at a time when economic uncertainty has never been so heightened.

Unlike just a few months ago when it was clear that the Federal Reserve would continue to raise interest rates to slow economic expansion, whether people liked it or not, the central bank is now watching and waiting and adjusting based upon ebbs and flows that are essentially impossible to predict.

This is one of the most interesting times to be alive for anyone with an interest in economics, because it’s a moment where the world’s most important banker has never been in such a deferential position to fate. His decisions still matter. Raising rates increases the cost of living across the country and world: it makes mortgages costlier and cars more expensive….