Federal Reserve Chairman Ben Bernanke is expected to give his annual Jackson Hole speech on August 31 while the world waits in anticipation. They are likely to be disappointed.
In past years the invitation-only event hosted by the Kansas City Fed in Jackson Hole, Wyoming, has been an opportunity for Bernanke to suggest future Fed policy actions. In 2010 he said that a second round of stimulus — called QE2 for Quantitative Easing Round Two — was likely, and in November the Fed began its purchase of another $600 billion of long-term debt securities.
Since then little has changed: Unemployment remains significantly above eight percent, the housing market remains largely moribund, gross domestic product remains barely positive, and consumer confidence is waning.
Some investors are expecting nothing but a repeat of Bernanke’s talk in Jackson Hole last August when he said: “The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment” but “most of the economic policies that support economic growth in the long run are outside the province of the central bank.”
Which was a banker’s way of saying, “We’re pushing on a string here, but nobody’s pulling at the other end.” Skeptics such as Axel Merk, president of Merk Investments, said that continued pushing wasn’t likely to have any impact:
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Photo of Federal Reserve Chairman Ben Bernanke: AP Images