24 August 2021
The Jackson Hole Economic Policy Symposium, hosted by the Federal Reserve Bank of Kansas City, is set to begin on 26 August 2021 with oral and written presentations focused on macroeconomic policy in an uneven economy. Federal Reserve Board chairman Jerome Powell will make a presentation on 27 August.
Since the Federal Reserve released its minutes of the 27-28 July Federal Open Market Committee meeting, the biggest buzz has been speculation s to when the Federal Reserve would begin easing back on its $120 billion per month purchases of agency mortgage-backed securities and U.S. Treasury securities. These purchases have been instrumental in keeping interest rates low during the Covid-19 pandemic with the intent of spurring business spending and investment, sustaining consumer demand, and maintaining certainty in the financial markets.
The minutes from the FOMC meeting has hinted at a possibility of Fed asset purchases tapering off as early as the end of this year and upward pressure on interest rates, especially in the longer-term range, is expected.
Meanwhile, U.S. Vice-President Kamala Harris today heads to Vietnam as part of the second leg of a four-day tour of Asia. Ms Harris’ primary mission appears to include not only the building of relationships with certain Asian countries, but to let Asian countries know that they have an economic partner alternative to China.
China’s Belt and Road Initiative throughout Asia as well as its claims on the South China Sea through which trillions in dollars of commercial trade passes through poses an economic threat to the United States. Unless the US can pose itself as a reliable economic trading partner to Malaysia, Vietnam, Singapore, and Taiwan, amongst other nations, then the United States may be locked out of the Asian markets or forced to buy and sell goods and services in the region on onerous terms.
Ms Harris has been making the argument that China’s efforts in the South China Sea are illegal under international law.
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