Why it matters: The meeting has become a forum for economic VIPs (read: policymakers and central bankers) from around the world to discuss pressing economic issues, float new ideas, and make announcements that land the cover of The New York Times.
- It’s kind of like Coachella, except there are economists instead of influencers and speeches from central bankers instead of musical acts…sounds like our kind of party.
And when the who’s who of economics get together to talk shop for three days at the Jackson Lake Lodge, you know Wall Street will be sitting on the edge of its seat.
Markets have tumbled this week as investors brace for Jerome Powell, the US Federal Reserve chair, to confirm that the bank isn’t finished hiking interest rates to slow inflation.
- Last year, he laid out why inflation might prove to be temporary but (since inflation is still very much a problem) the Fed is switching gears this year.
- There is a chance that Powell will commit to another large rate hike, but experts say stocks have a chance to rally if he delivers a less aggressive message.
- So far, the S&P 500 and Canada’s S&P/TSX Composite Indexes have fallen by 3% and 1% this week, respectively, in anticipation of a worst-case scenario.
Big picture: Investors and economists are looking to get a sense of the path forward for US interest rate increases, especially since those decisions can rock countries across the pond.