Money For the Rest of Us

Where Are Interest Rates Headed Next? Insights from the Jackson Hole Symposium

Sep 20, 2023

Locking in higher yields now is advised as real interest rates are the highest in 15 years. Discusses topics from the Jackson Hole Symposium, central bank policy actions, neutral real rate of interest, importance of new ideas, and factors affecting interest rates. Also explores how ideas fuel economic growth and offers investment strategies for higher rates.

28:37

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Quick takeaways

The Jackson Hole Symposium is an annual event where central bankers discuss monetary policy, economic growth, and trade, emphasizing forward-looking decisions and robust policymaking under uncertainty.

Central banks aim to achieve stable inflation and full employment by determining the neutral real rate of interest, while the creation and implementation of ideas are crucial for long-term economic growth and improved living standards.

Deep dives

Key Points from the Jackson Hole Symposium

The Jackson Hole Symposium is an annual event where central bankers, policymakers, academics, and investors discuss employment, central bank policy, financial markets, economic growth, and trade. The event focuses on monetary policy and growth as well as global trade and financial flows. One important aspect highlighted by Christine Lagarde, President of the European Central Bank, is the need for forward-looking decisions and robust policymaking under uncertainty. The central bankers make decisions regarding interest rates and buying/selling assets to influence economic growth and employment rates.

Introduction

3min

Understanding Central Bank Policy Decisions and their Impact on Interest Rates

4min

Central Banks' Policy Decisions and Targets

3min

Policy Rates and their Impact on Inflation and Employment

5min

Themes, Tactical Decisions, and a Sponsor Ad

4min

The Role of Ideas in Economic Growth

10min

Analyzing Current and Future Interest Rates

2min

Why you might want to lock in higher yields now, given real interest rates are the highest they have been in 15 years.

Topics covered include:

What was covered this year at the Federal Reserve Jackson Hole Symposium
What are the primary policy actions central banks take, and how do they influence interest rates
What is the neutral real rate of interest, and why is it important
Why new ideas are central to an increasing standard of living
What would drive interest rates higher or lower from current levels
Why now is an attractive time to lock in longer-term yields

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Show Notes

Jackson Hole Economic Policy Symposium: Structural Shifts in the Global Economy—Federal Reserve Bank of Kansas City

Policymaking in an age of shifts and breaks by Christine Lagarde—European Central Bank

Inflation: Progress and the Path Ahead by Jerome H. Powell—The Federal Reserve Bank

Structural Shifts in the Global Economy: Structural Constraints on Growth by Chad Syverson—Federal Reserve Bank of Kansas City

The Outlook for Long-Term Economic Growth by Charles I. Jones—Federal Reserve Bank of Kansas City

Living with High Public Debt by Serkan Arslanalp and Barry Eichengreen—Federal Reserve Bank of Kansas City