Visible Tapering... Attention Focused on Jackson Hole Meeting

Partial Closure of Ningbo Port in China and COVID-19 Spread Intensify Inflation Pressure
Jackson Hole Meeting to Gauge US Fed's Monetary Policy Direction
Market Momentum May Be Limited Without Clearer Tapering Information

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Attention is focused on the upcoming Jackson Hole meeting starting on the 23rd, following the Federal Open Market Committee (FOMC) minutes suggesting asset purchase tapering within this year.

According to Mirae Asset Securities on the 21st, Federal Reserve (Fed) officials reportedly judged at the July FOMC that it would be appropriate to begin tapering this year. This is because inflation has already met the target, and employment has also reached the desired level.

Inflationary pressures across a broad range of areas are expected to intensify. One of the world's three largest ports, Ningbo Port in China, has been partially closed, and global supply chain disruptions continue due to the spread of the COVID-19 Delta variant. According to the New York Times on the 20th (local time), the average daily new COVID-19 cases in the U.S. over the past week reached 143,827, a 44% increase compared to two weeks ago.

Park Hee-chan, a researcher at Mirae Asset Securities, said, "However, amid the overall slowdown in Chinese economic indicators, copper and crude oil prices recorded their lowest levels in four months and three months, respectively," adding, "This will partially offset inflation caused by supply chain disruptions."

Market attention is focused on the Jackson Hole meeting to be held from the 23rd to the 27th. The Jackson Hole meeting is an economic policy symposium held every August by the Federal Reserve Bank of Kansas City and is known as a venue to gauge the Fed's monetary policy direction. In the past, in 2010, former Fed Chairman Ben Bernanke presented the second round of quantitative easing policy at the Jackson Hole meeting, indicating the direction of monetary policy.

Researcher Park explained, "However, information about tapering is unlikely to become clearer at the Jackson Hole meeting on the 23rd," adding, "This uncomfortable situation may limit market vitality for the time being." He also advised, "If the U.S. core Personal Consumption Expenditures (PCE) price is at or below market consensus, there will be little impact," but cautioned, "Attention should be paid to whether the decline in unemployment claims continues." The core PCE price index in June rose 4.0% year-on-year, which had previously stirred inflation fears.

This content was produced with the assistance of AI translation services.