Powell’s Jackson Hole Speech Came Three Years Too Early
The Fed chair’s comments in 2018 didn’t make history, but his argument for taking things slowly resonate today amid the global delta outbreak.
At times, history has been made at Jackson Hole, as the world’s central bankers gaze at the snow-dusted Tetons, coffee cups in hand, to discuss the most pressing economic issues of the day. It’s where Alan Greenspan gave his famous speech explaining why monetary policy shouldn’t be used to prick stock market bubbles, and where, about a decade later, Ben Bernanke laid the groundwork for a fresh round of quantitative easing.
More often than not, though, the retreat is a discourse of wonky ideas that never really make a dent in public conversation. It’s fair to say that Federal Reserve Chair Jerome Powell’s 2018 speech, his first in the role, fell into this latter category. It shouldn’t have. At the time, he argued policy makers shouldn’t feel compelled to hasten tightening just because conventional wisdom, anchored in past anxieties about runaway inflation, says they should. Powell extolled the virtues of risk management championed by Greenspan.