Follow Paul Donovan

The burden of legacy

| Posted by: Paul Donovan | Tags: Paul Donovan

  • In between roasting marshmallows over a camp fire, Fed Chair Yellen and ECB President Draghi will deliver remarks at the Jackson Hole summer camp for central bankers. Draghi's remarks are not likely to offer much insight. Yellen is a different matter, as the burden of "legacy" is now looming large over the Fed Chair.
  • Central bank policy rests on monetary, quantitative and regulatory pillars, and the Fed Chair could touch on all three. There are unlikely to be dramatic revelations of view, perhaps. However, speaking to an audience of experts, the Fed Chair could seek to influence the framework economists use to judge future Fed policy.
  • No speeches from US President Trump, but the Trump Twitter Feed has been active with criticism of Republican leaders in Congress. Given current political realities, investors may start paying more attention to the views of the maligned Congressional leadership than to the Trump tweets.
  • Japanese inflation was mixed – consumer prices were in line with expectations, but the August Tokyo measure rose on food and healthcare prices. Producer price inflation (a better reflection of corporate pricing power) disappointed. Revised German GDP is also due.