Barclays: Risk Management Theme To Be Prominent At Jackson Hole

Looking ahead at the Jackson Hole symposium, Barclays notes that they saw the July Fed minutes' tone as hawkish, with "FOMC participants [] more concerned about weakness in activity data leading into the meeting than was communicated in the statement and press conference, which brushed aside these signals showing a strong labor market and robust inflation. What emerged was a more subtle "risk management" justification for continuing to push rates into restrictive territory, despite downside risks".

• Barclays saw the FOMC as having set a "high bar" for "whether it has seen sufficient evidence of a sustained deceleration in prices to step down from aggressive hikes".
• They expect "such risk-management rhetoric will be prominent" at Jackson Hole - "we suspect that the Chair will use the opportunity to sketch out the committee's strategy as it attempts to guide policy to a "moderately restrictive" position in coming meetings, with risk management and data dependence likely to be key themes."