Jackson Hole: Little in the way of new ideas

Jackson Hole will most likely be remembered for the Fed’s Vice Chairman stealing the limelight from his boss in an offstage interview. After a relatively uneventful Yellen speech, Fischer threw the cat amongst the pigeons, arguing the case for a September hike and possible two this year. Yellen’s speech used academic research to express her confidence in their current toolkit to handle the next downturn, which many fear will start from a low level of interest rates. Disappointingly there was little in the way of new ideas. Expanding their mandate to include buying a broader range of assets was said to be something for “future policy makers” rather than building the foundations now. Fiscal expenditure and productivity growth were often mentioned as key ingredients that are out of policy makers control that are needed for future growth.