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Saturday, August 23

23rd Aug - Special: Jackson Hole


Previously on MoreLiver’s:

Jackson Hole returns to its rootsTradingFloor
Juhani Huopainen: The focus of Jackson Hole is expected to move away from being a platform for product launches back to a forum for economic discussions. Meanwhile, markets have been riding high while expecting a dovish message from the Federal Reserve's chair Janet Yellen. It's also the first time ECB president Mario Draghi will be speaking at Jackson Hole, although he's not expected to say anything too meaningful.

Five Questions for Participants at Fed’s Jackson Hole ConferenceWSJ

Short Note Ahead of the Double Feature from Jackson HoleMarc to Market

5 Things To Watch When Mario Draghi Speaks in Jackson HoleWSJ

Jackson Hole Guide: Investors Seek Yellen Job-Market View

Jackson Hole: 'Tremendous' Downside Risks If Yellen Doesn't Go Full Dovish
Citi’s Englander: The consensus expectation is overwhelming that Fed Chair Yellen will deliver a dovish message at Jackson Hole ... Our question is whether Yellen can be more dovish than what is now priced in, not whether she will be dovish on the Richter scale of dovishness.

The Legend of
Jackson Hole FT
Jackson Hole’s reputation owes much to the speeches Ben Bernanke gave from 2007 to 2012. But much of this was an accident of timing rather than a deliberate plan to use
Jackson Hole to send a message. It happened each year that the economy deteriorated during the spring and summer, leading the Fed to launch a new round of stimulus in the autumn

Not One Analyst Thinks Yellen Will Say Anything Remotely Hawkish

Yellen returns Jackson Hole to wonky roots
The conference was never designed to communicate monetary policy and Ms Yellen may not have a blockbuster in mind this year.

Dramas to match scenery at Jackson Hole
Labour market dynamics to play central role for monetary policy

How Jackson Hole became such an important economic talking shop
The Economist

Why You Should Care About Jackson Hole
Mohamed A. El-Erian: What can be done to put more people back to work? How much power do central banks really have? What is the global impact of central bank policies?

Keep rates low until the hidden jobless return to work
Persistent unemployment will do more lasting damage than a rise in inflation, writes Adam Posen.

Yellen resolved to avoid raising rates too soon, fearing downturn
Approaching an historic turn in
US monetary policy, Janet Yellen has staked her tenure as chair of the Federal Reserve on a simple principle: she'd rather fight inflation than another economic downturn.

Expect No Fresh Signals from Yellen and Draghi at Jackson Hole –
Marc to Market
Yellen will likely argue the case of there being significant slack (underutilisation) in the labour market. For Draghi too,
Jackson Hole does not seem like a particularly likely forum for some policy revelation.

Before Jackson Hole, round-up of Yellen’s quotes on the labour market

When Packing for Jackson Hole, include these economic reports
Inflation Is Warming Up * Housing Still Has Problems

At Jackson Hole, Central Banks Moving in Different Directions
WSJ’s Jon Hilsenrath’s preview of Jackson Hole. The big question: will the Fed wait too long to raise rates?

Heading Into
Jackson HoleTim Duy’s Fed Watch
Anything other than a dovish message coming from the
Jackson Hole conference will be a surprise. Tight labour markets alone will not justify an aggressive pace of tightening. An aggressive pace requires that those tight labour markets manifest themselves into higher wages growth and higher inflation. Yellen seems content to normalise slowly until she sees the whites in the eyes of inflation.

Don’t Hike Alone Is Jackson Hole Bear Warning for Central Banks
Yellen continues to caution that labour markets are slack enough to merit low interest rates, while European Central Bank President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda may even deploy more stimulus before the end of the year to battle low inflation.

Special Edition Grand Central: Live from Jackson Hole!WSJ
Yellen Says Job Market Improving, but Noncommittal About Policy Effect * ECB’s Draghi Signals Departure From Austerity Focus * BOJ’s Kuroda Sees Pickup in Global Growth, Japanese Exports * Fed’s Lockhart: Unemployment Rate Overstates Job Market Progress * Activists at Jackson Hole See Recovery on Wall Street, ‘Not My Street’ * Jackson Hole Research Roundup

Symposium ProgramFED
Includes papers, presentations

Fed Conference Paper: Concern Over Long-Term U.S. Joblessness OverdoneWSJ
The problem of long-term joblessness following the recession is vastly overstated by a focus on what the authors see as the wrong sort of data.

Fed Conference Paper: There’s Nothing ‘Natural’ About UnemploymentWSJ

Jackson Hole Study Authors See Lost Job Market DynamismWSJ
U.S. policy makers have long prided themselves on the dynamism of U.S. labor markets, which, unlike Europe’s, allow workers and businesses to adapt quickly as the economy evolves. A study raises questions about whether U.S. labor markets are actually all that dynamic.

Jackson Hole paper: Automation is Polarizing the Labor MarketWSJ
While thinning out the ranks of middle-class jobs easily replaced by machines, automation is increasing the ranks of low-skilled workers who perform tasks that can’t easily be displaced by machines — like cooks or home health workers — and the ranks of high-end workers with abstract thinking skills that computers can’t match.

A Theory on Long-Term Economic Trends and a Sudden CrashNYT
Employment losses during the Great Recession may have had more to do with factors like the rise of Walmart than with the recession itself, two economists say in a new academic paper.

Great Recession's damage to U.S. labor market was typical: paperReuters
The deep recession of 2007-2009 dealt no more permanent damage to the U.S. labor market than other recent downturns, according to a research paper prepared for a central banking conference that disputed the notion it left unusually heavy economic scars.

U.S. labor market less flexible than in 1990, economists warnReuters
The U.S. labor market has become steadily less dynamic since 1990, with workers seemingly locked into particular jobs and a more sluggish process of job creation and destruction in the private sector, according to research to be presented to global central bankers on Friday.

Computers reshaping global job market, for better and worse: paperReuters
Automation and increasingly sophisticated computers have boosted demand for both highly educated and low-skilled workers around the globe, while eroding demand for middle-skilled jobs, according to research to be presented to global central bankers on Friday.

A slight clarification about the "end of labor"Noahpinion

Yellen’s SpeechFED

Yellen: Slack Remains, QE Is Over, Rates Could Rise Sooner (Or Later) – ZH
Yellen: Unemployment Rate "somewhat overstates" Improvements – Calculated Risk
Yellen Keeps Focus on Labor Market Slack – BB
Yellen Noncommittal on Jobs, Rates; Markets Yawn – WSJ
What Yellen Said, What the Markets Heard – WSJ
The Market Reacts To (Then Reads) Janet Yellen's Speech – ZH
Wall Street's Take On Jackson Hole: "Yellen Was Not Dovish Enough" – ZH
Janet Yellen: Three Reasons Wage Trends Can’t Be Trusted – The Reformed Broker
Yellen says she’s confident in labor market progress, uncertain of road ahead – WaPo
Janet Yellen’s Rorschach speech – FT
Three Separate Economists Made The Exact Same Joke About Yellen – BI
Yellen says job market still in recovery – Reuters
Yellen Facing Hard Call on When Labor Market Has Healed – BB
Yellen Cites 19-Measure Labor Market Index – BB

Draghi’s speechECB
Draghi’s presentation slides – ECB

Mario Draghi Takes The Wind Out Of Citi's "QE In December" Sails – ZH
Draghi says ECB stands ready to adjust policy further – Reuters
Draghi Says ECB Ready to Do More as Governments Urged to Help – BB
Draghi at Jackson HoleMainly Macro

Draghi’s Fantastic Speech On What's Wrong, But Still In Denial On One Big ThingBI
Austerity wasn't necessary. Yes, there were problems in the eurozone, but they had to do with the unsound currency structure. Draghi is still denying that there was massive self-inflicted harm for no reason at all.

Draghi’s speech suggests weak start for EURO on MondayTradingFloor

A less dovish Yellen, a more dovish DraghiThe Economist

ECB may need to act if European inflation falls further: DraghiReuters
A further drop in European inflation would pose price stability risks and the European Central Bank would use "all the available instruments" in response, ECB President Mario Draghi said on Friday.

Draghi Signals ECB Action as Inflation Expectations SlideBB
Mario Draghi said inflation expectations have deteriorated across the euro area and signaled policy makers are ready to add fresh monetary stimulus.

Bank of England
BoE can resolve financial stability coordination issues: BroadbentReuters
There are potential "coordination issues" between the BoE’s new financial stability committee and other bank functions, a senior BoE official said on Saturday, adding that these issues can be resolved.

BOE’s Broadbent Says Path of Rates to Be ‘Materially Different’BB
Echoing Governor Mark Carney’s point that any increase in the U.K. benchmark from 0.5 percent will be gradual

BOE’s Broadbent Says Labor Data Is Key in Post-Crisis WorldBB
“The output data are no longer sufficient statistics for inflationary pressure: even if you have to wait a while to see them, movements in unemployment become important too”

BoJ may ease policy for 'some time' to slay deflation: KurodaReuters
The Bank of Japan may have to pursue its aggressive monetary policy easing for "some time" to fully vanquish deflation, BoJ Governor Haruhiko Kuroda said on Saturday.

Added later
Fed in 'real debate' on rate hike in early to mid-2015: LockhartReuters
The U.S. Federal Reserve is focused on an initial interest rate hike between the first quarter and the middle of next year, with possible changes in its main policy statement as soon as next month, Atlanta Fed President Dennis Lockhart said on Saturday.

Fed's Bullard says no 'significant' slack in U.S. labor marketReuters
A top Federal Reserve official said on Friday that little slack remained in the U.S. labor market and that the central bank should not be too timid when the times comes to raise interest rates.

Yellen Riding U.S. Growth Veers From Draghi as EU StallsBB
The world’s two most powerful central bankers are nearing a transatlantic gap in monetary policy as the Federal Reserve debates raising interest rates while the European Central Bank signals more stimulus.

Job concerns dominate Jackson Hole debateFT
The stereotype, said Mr Draghi, is that all Europe’s unemployment is structural – and thus permanent – while all US unemployment is cyclical – and will go away as the economy recovers. The message of both central bank chiefs, he said, is that reality is more complicated. “It’s complicated!” was pretty much the message from Jackson Hole this year.

Yellen Referenced This 19-Component Labor Market Index At Jackson HoleBI

Pressure builds within Fed to signal new policy courseReuters
Pressure is building within the Federal Reserve for officials to move as early as next month to more clearly acknowledge improvements in the U.S. economy and lay the groundwork for the central bank’s first interest rate hike in nearly a decade.

From Twitter: Barclays calls Draghi speech at Jackson Hole 'a major breakthrough' - may be 1st time ECB prez called for agg. demand increase

Europe fears deflation as Ukraine stays center-stageReuters
The euro zone's growing fears of deflation will be stirred again on Friday when preliminary consumer price data for August is issued, with signs the European Central Bank could be looking at bolder steps to help the region's stagnant economy

FX: Did Draghi just hint at QE?Nordea
After ECB Draghi's Friday remarks on inflation, ECB stimulus speculation will increase further. If the market interprets his remarks as a QE hint in line with Bernanke's QE2 suggestion of Jackson Hole 2010, we will see the EUR weaken substantially in the run-up to a formal announcement. While a weaker EUR will be unwelcome for the Riksbank, it is unlikely to push the Riksbank in an unconventional direction.

Jackson Hole Theme: Labor Markets Can’t Take Higher RatesBB
The focus on jobs suggests the Fed and Bank of England will tighten policy within a year as their economies show signs of strengthening. By contrast, European Central Bank President Mario Draghi and Bank of Japan Governor Haruhiko Kuroda acknowledged they may be forced to deploy fresh stimulus.

Draghi Pushes ECB Closer to QE as Deflation Risks RiseBB
Stocks rose and bond yields dropped with the euro today as the comments fanned speculation the ECB is finally heading for a form of monetary stimulus it has long avoided

The eurozone needs an alternative solution to its economic woesThe Guardian
ECB head Mario Draghi is calling for more growth-friendly policies, but a little quantitative easing won't do the job

Takeaways From Jackson Hole 2014WSJ

Did Jackson Hole bring out the eurosceptic in Draghi?TradingFloor
The consensus view on last weekend's Jackson Hole symposium was that Fed is a tad hawkish and the ECB a bit dovish. Many missed that effectively the ECB's Draghi said that the euro area's crisis-fighting policies have been counter-productive and have to be reversed.

Mario Draghi lays the groundwork for QE in Jackson Hole speechTradingFloor
ECB President says cyclical unemployment still significant and inflation expectations are falling, The risks of doing too little outweigh those of doing too much. Meanwhile the OMT program is in place, ready to be activated.

Blogs review: Is this a European U-turn?Bruegel
Speaking at the Federal Reserve Bank of Kansas City's annual conference Jackson Hole, Wyo., ECB President Mario Draghi made an important speech recognizing that the recovery in the euro area remains uniformly weak and that the euro area fiscal stance was not helping the ECB do its job. Interestingly, French leaders also reintroduced over the weekend the notion of aggregate demand, a concept they had noticeably moved away from with the “Pacte de responsabilite”.

Draghi increases likelihood of further easingDanske Bank

Mario Draghi Gave A Big Speech On Friday — But The Most Crucial Part Wasn't In The Original TextBI

About-face for ECB's Draghi as he seeks to jolt euro zone into lifeReuters
Prodding governments to do more to boost demand and hinting at European Central Bank action to go along with it marks a major shift in ECB chief Mario Draghi's euro zone policy away from a focus on austerity towards reviving growth.

Odds and Ends as Jackson Hole Notebook ClosesWSJ
A Few Fed Policy Answers From the Jackson Hole SidelinesWSJ