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Jackson Hole offers reassurance, suggests soft landing likely for US economy

    • Jerome Powell (left), chairman of the US Federal Reserve; with Kazuo Ueda, governor of the Bank of Japan; and Christine Lagarde, president of the European Central Bank, at the Jackson Hole economic symposium. Powell has said the US central bank is prepared to raise interest rates if needed, and intends to keep borrowing costs high until inflation is on a convincing path towards the Fed's 2 per cent target.
    • Jerome Powell (left), chairman of the US Federal Reserve; with Kazuo Ueda, governor of the Bank of Japan; and Christine Lagarde, president of the European Central Bank, at the Jackson Hole economic symposium. Powell has said the US central bank is prepared to raise interest rates if needed, and intends to keep borrowing costs high until inflation is on a convincing path towards the Fed's 2 per cent target. PHOTO: BLOOMBERG

    Rob Curran

    Published Mon, Aug 28, 2023 · 01:55 PM

    AT THE Jackson Hole central-banking confab on Friday (Aug 25), Federal Reserve chairman Jerome Powell hinted he may be done with interest-rate hikes.

    Powell did not make any explicit promises because, as he has observed in the past, the Fed can stoke the flames of inflation by merely talking about a halt in rate hikes.

    Any concrete guidance on a permanent halt would cause borrowing rates to fall pre-emptively, encouraging a bout of risk-taking that would reinflate bubbles in assets from oil to tech stocks to real estate.

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