Tags: Fed | Jackson | Hole | Bernanke

Experts: Don’t Expect Much From the Fed’s Jackson Hole Meeting

Wednesday, 22 Aug 2012 10:11 AM

By Michael Kling

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If you’re expecting the Federal Reserve to announce a plan to revitalize the economy at its Jackson Hole, Wyo., meeting next week, you’re going to be disappointed, according to experts polled by CNNMoney.

No quantitative easing. No market-moving statements.

“I don’t think he’s going to say anything new,” Catherine Mann, a Brandeis University finance professor and former Fed economist, told CNNMoney.

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist. 

Financial markets are eagerly anticipating Federal Reserve Chairman Ben Bernanke to make some kind of important monetary policy statement that lays out a path to economic recovery. After all, he’s done that before at Jackson Hole, a Wyoming ski resort town where the Fed holds its closely watched annual meeting. For instance, in 2010 Bernanke revealed a possible second round of quantitative easing.

But not this time. The situation is different this time around.

Although the economy seems to be stuck in the doldrums, some statistics are encouraging. Unemployment remains high, but more workers found jobs in July, retail sales improved and home prices are at last rising, according to CNNMoney.

The contradictory data confuses the picture.

“There have been mixed signals making it hard to tell what’s going on,” Mark Gertler, a New York University economist, told CNNMoney. “We’re sort of in a gray area. I think Bernanke will make the case that the economy is underperforming, but it’s still hard to tell for sure what direction it’s headed.”

The Fed, which has kept interest rates near zero since 2008, has already done all it can, experts say. The problem is not interest rates, CNNMoney notes, but Europe’s debt crisis, a global slowdown and uncertainty about taxes and spending.

Bernanke’s triage assessment on Aug. 31 can take one of three forms, says David Kotok, chairman and chief investment officer of Cumberland Advisors, writing for Business Insider. He could say the economy is recovering and needs no additional medicine, is stable but needs to continue taking medicine, or that it’s still too sick and needs help immediately.

Bernanke could also be ambiguous and cover all three scenarios and lay out all the conflicting information, Kotok adds.

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

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