How the Jackson Hole Conference Became an Economic Obsession

Filmmakers have Cannes. Billionaires have Davos. Economists? They have Jackson Hole.

This week, the most exclusive economic meeting in the world takes place in the valley at the base of the Teton Mountains, at a lodge located 34 miles from Jackson, Wyo.

Here, in an elegant Western hotel donated to the surrounding national park by a member of the Rockefeller family, about 120 economists descend each late August to discuss a series of curated papers on a policy-related topic. Senior officials from around the world are often found peering out of the lobby’s floor-to-ceiling windows – hoping to see a moose – or debating the merits of an inflation model over cranberry drinks.

This concert, nerdy though it was, became a major focus of Wall Street investors, academics, and the press. The conference host, the Federal Reserve Bank of Kansas City, seems to know a thing or two about the laws of supply and demand: It invites far fewer people who want to attend, which only serves to boost its standing. But more importantly, Jackson Hole tends to generate big news.

The most anticipated event is the Fed Chair’s speech which usually takes place on Friday morning and is often used as an opportunity for the central bank to send a signal about policy. Jerome Powell, the current Fed chair, made headlines with both of them all One of his Jackson Hole words, Which made investors wait impatiently this year. This is the only part of the closed conference broadcast to the public.

Mr. Powell will be speaking at a time when the Fed’s next moves are uncertain with inflation moderating but the economy retaining a surprising amount of momentum. Wall Street is trying to figure out if Fed officials think they need to raise interest rates more this year, and if so, whether such a move is likely to come in September. So far, policymakers have given few clear signals about their plans. They raised interest rates to 5.25-5.5% from almost zero in March 2022, leaving their options open to do more.

People will pay close attention to Mr. Powell’s speech, but “I think it’s a matter of tone,” said Seth Carpenter, a former Fed economist now at Morgan Stanley. “What I don’t think he wants to do is signal or commit to any political moves in the near term.”

Despite its recent fame, the Jackson Hole Conference was set up Thursday night to SaturdayIt wasn’t always the talk of the town in Washington and New York. Here’s how it became what it is today.

Set in the former Wild West.

Jackson is used to hosting a very different set of characters: the town was once so remote that it was a haven for outlaws.

In 1920, when Jackson’s population was about 300, The New York Times is back to a not-too-distant era when “whenever a serious crime was committed between the Mississippi River and the Pacific coast, it is very safe to guess that the man responsible for it was either going to Jackson Hole or had already reached it.”

Jackson’s isolation also means that the region’s steep, rocky mountains and rolling valley have been kept pristine, making it prime territory for conservationists. Financier and philanthropist John D. Rockefeller Jr. surreptitiously acquired He then donated a large portion of the land that would eventually become the Jackson Hole section of Grand Teton National Park. Around 1950, he began building the Jackson Lake Lodge.

The architecture of the hostel was modern Not popular at first by the locals. (“The phrase ‘slab-sided concrete abomination’,” The Times quipped in 1955, “is one of the milder epithets hurled at the massive structure.”) Among other complaints, Rockefeller’s donation to the park lacked resort privileges: there were none. Golf course, no spa. .

But by 1982, its large area and broad horizons had caught the attention of the Federal Reserve Bank of Kansas City, which was looking for a new location for the conference it began holding in 1978.

The assembly has been there since 1982.

High on his list of charms was Jackson Lake Lodge Close to excellent fishing — a surefire way to attract then-Fed Chairman Paul A. Volker. It came, and between the distinguished attendees and the natural beauty of the site, Jackson Hole quickly became the Fed’s event of the year.

The Times reported in 1985: “about half of the 137 people invited this year turned up, a remarkably high response”.

The size of the conference hasn’t changed much since then: Attendance averages about 115 to 120 people annually, according to the Kansas City Federal Reserve Bank. The response rate has risen significantly since 1985, although the Federal Reserve branch refused to say how much.

But the local context has changed.

Teton County, home of Jackson (now a bustling city 11,000) and Jackson Hole, home to more millionaires than criminal cowboys today. It has become The most unequal place in America By many measures, with increasing wealth and Enter swears. The juvenile, once described as rustic, now struggles to pretend his background is not luxurious.

And the Fed meeting itself has gained more and more traction. Alan Greenspan gave the opening address at the conference in Jackson Hole in 1991, when he was chairman of the Federal Reserve, and continued that tradition for fourteen summers until he stepped down.

His successors have mostly followed suit. Mr. Powell has used his speeches to Beware of over-reliance on hard-to-quantify economic variables, unveiling an entirely new framework for monetary policy and a pledge that the Fed will do everything it can to tackle rapid inflation.

But it changes.

Interest in Jackson Hole was also deepened by the 2008 global financial crisis, when central banks bailed out markets and propped up economies in ways that expanded their influence. In the years that followed, uninvited journalists, Wall Street analysts, and protest groups began camping out in the hotel lobby during the proceedings. Speaking at or chairing a Jackson Hole session was a growing sign of the economist as an academic rock star.

Esther George, president of the Federal Reserve Bank of Kansas City between 2011 and early 2023, was in charge of the event as the event garnered more attention. She and her team have responded to the intense spotlight in part by changing who gets to enjoy it.

He got far fewer economists in the banking and financial industry Invitations to this event since 2014, partly in response to public interest in the Fed’s relationships on Wall Street after the financial crisis. The people who get on the list tend to be current and former chief economic officials and up-and-coming academics. Increasingly, they are women, people from ethnically diverse backgrounds, and people with different economic views.

Ms. George began organizing an informal happy hour for female economists in 2012, when there were so few women there that “we could all sit around a little table”, she recalls. It made her think, “Why aren’t there these other voices here?”

last year, Happy hour included dozens of women.

But Jackson Hole may usher in a new era. Mrs. George had to retire in 2023 per Fed rules, so while she helped plan this conference, she will pass the baton for future events to Her successor is Jeffrey SchmidUniversity administrator and former CEO of Mutual Bank of Omaha. He started as president of the Kansas City Federal Reserve Bank on Monday and will make his debut as a Fed official at the meeting this week.