In the waning days of summer, a mountain getaway sure sounds nice; the cool dry breezes of the Tetons, a slight nip in the evening air and scores of the world's top government bankers. That's the draw of the Federal Reserve Bank of Kansas City's annual economic symposium in Jackson Hole, Wyo., beginning Thursday.
This annual gathering has been the scene of jawboning by central bankers signaling changes that may show up in policies and practices months hence. Two rounds of bond buying by the Fed, intended to push long-term interest rates down, were foreshadowed at this retreat months before the strategies were deployed. This year investors will be listening to hear if the central bank auditions new language regarding short-term interest rates.
It has been almost two years since the agency's interest rate setting committee pledged to keep its target rate near 0 percent for "a considerable time." Since the phrase first appeared the S&P Case-Shiller Home Price Index has jumped 20 percent, the unemployment rate has dropped from 7.8 percent to 6.1 percent and the S&P 500 stock index has risen by a third.
The host of the conference, Kansas City Fed President Esther George, is squarely in the camp that considerable time has elapsed and the bank needs to raise interest rates. She's been concerned about low borrowing costs leading to an exorbitant appetite for risk for about a year now but she doesn't get to vote on the bank's interest rate strategy this year.
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This late summer's symposium comes as the Fed winds down its latest stimulus program. The end of two previous efforts led to double-digit stock losses. No doubt, the economy is stronger now, but for investors hooked on low borrowing costs, any sign that time is running out could send a chill wind through their portfolios.
Tom Hudson, financial journalist, hosts "The Sunshine Economy" on WLRN-FM in Miami, where he is the vice president of news. He is the former co-anchor and managing editor of "Nightly Business Report" on public television. Follow him on Twitter HudsonsView.