AAA Aug. 31, 2012
Spotlight: Jackson Hole
By PAUL WISEMAN
Every August, economists and central bankers convene in Jackson Hole, Wyo., to present papers and argue about economic issues. But they mostly wait to see what the Fed chairman has to say.
Investors are hoping Chairman Ben Bernanke will at least hint Friday that the Fed is ready to launch another round of bond purchases to try to lower long-term interest rates and spur more borrowing and spending.
But he’s unlikely to deliver. Many economists say a slightly brighter economic outlook has lessened the urgency for the Fed to act.
Hopes for further action rose last week when the Fed released minutes of its July 31-Aug. 1 meeting, which indicated that further steps “would likely be warranted fairly soon” unless it saw evidence of “a substantial and sustainable strengthening” of the economy.
Jackson Hole took on heightened importance after Bernanke used his remarks there in 2010 to lay out policy options, including a second round of bond purchases. Back then, he feared a possible deflationary spiral in which falling prices pull down business profits and send the economy back into recession.
But this year, the economy appears in less danger. Job creation and retail sales last month proved stronger than expected. And home prices climbed in June from a year earlier, the first such increase since the summer of 2010.Associated Press
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.