# Take Five: Taking in the vistas from Jackson Hole
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-19
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Jackson Hole Focus: Fed Meeting, Euro Zone PMI, China Rate
Meta Description: Stay tuned for updates on the Federal Reserve's confab in Jackson Hole, euro zone PMI, and rate cuts in China. Don't miss out on key market insights!
URL: https://financedigest.com/take-five-taking-in-the-vistas-from-jackson-holehtml

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(Reuters) – Jackson Hole, Wyoming, is the focal point for markets in the coming week as investors zero in on the Federal Reserve’s annual confab.

Business activity indicators in the euro zone and an inflation gauge in the United States are also on tap, while rate cuts may be looming in China.

Here is a look at the week ahead from Tommy Wilkes and Marc Jones in London, Kevin Buckland in Tokyo, Ira Iosebashvili and Lewis Krauskopf in New York, Riddhima Talwani in New Delhi, Sumanta Sen in Mumbai and Vineet Sachdev in Bengaluru.

1/JACKSON HOLE JAMBOREE

How big will future [rate hikes](https://www.financedigest.com/hopes-of-slowdown-in-rate-hikes-bolster-shares-ahead-of-u-s-gdp.html "Hopes of slowdown in rate hikes bolster shares ahead of U.S. GDP") be? How strong is the economy? What about quantitative tightening?

Investors hope the Federal Reserve may shed light on those questions when central [banking heavyweights meet](https://www.financedigest.com/the-recent-bank-of-england-meeting-the-biggest-rate-hike-recession-warning-and-the-fallout.html "The recent Bank of England meeting, the biggest rate hike, recession warning and the fallout") on Aug. 25-27 for their annual symposium in Jackson Hole, Wyoming.

U.S. stocks have screamed higher this summer, despite Fed warnings that expectations of a peak in [inflation and a so-called dovish pivot from the central bank](https://www.financedigest.com/be-really-really-careful-on-inflation-bank-of-englands-haskel.html "Be ‘really, really careful’ on inflation – Bank of England’s Haskel") may be premature.

Some investors believe Chairman Jerome [Powell will push back against the market’s](https://www.financedigest.com/jittery-markets-attempt-risk-on-rally-while-waiting-for-powell.html "Jittery markets attempt risk-on rally while waiting for Powell") optimism again, reminding investors that there is one more inflation report and another jobs number before the Fed’s September meeting.

Also in demand are further details on the Fed’s reduction of its $9 trillion balance sheet, known as quantitative tightening, which some [investors have flagged as a potential](https://www.financedigest.com/virgin-orbit-says-space-startup-in-talks-with-potential-investors.html "Virgin Orbit says space startup in talks with potential investors") risk to market liquidity.

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/08/Tightening-up.jpg)

2/MORE PMI PAIN?

Concerns the [euro zone](https://www.financedigest.com/euro-zone-inflation-seen-just-above-ecbs-target-in-2025-poll-shows.html "Euro zone inflation seen just above ECB’s target in 2025, poll shows") economy is hurtling toward recession are building. Flash [purchasing managers](https://www.financedigest.com/marketmind-purchasing-managers-of-the-world-diverge.html "Marketmind: Purchasing managers of the world, diverge") index survey data should shed some light on how soon that might happen.

The August numbers, due on Tuesday, may show another month of business [activity contraction after S&P Global’s final composite Purchasing Managers’](https://www.financedigest.com/with-the-right-active-manager-you-really-do-get-what-you-pay-for.html "With the Right Active Manager, You Really Do Get What You Pay For") Index (PMI), seen as a good gauge of economic health, fell to a 17-month low of 49.9 in July.

Euro zone businesses are struggling from soaring energy prices and shortages, surging [inflation and expectations of higher interest rates](https://www.financedigest.com/german-inflation-rate-to-ease-over-course-of-2023-econ-minister.html "German inflation rate to ease over course of 2023 – econ minister"). An economic [sentiment index for euro zone powerhouse Germany recently showed investor sentiment falling in August as fears grow that the rising](https://www.financedigest.com/sterling-rises-as-receding-bank-sector-worries-lift-sentiment.html "Sterling rises as receding bank sector worries lift sentiment") cost of living will hit private consumption.

Tuesday will also [include the release of flash PMI numbers for the United](https://www.financedigest.com/stanchart-weighing-options-including-sale-of-aircraft-lessor-unit.html "StanChart weighing options, including sale, of aircraft lessor unit") States and Britain.

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/08/Slowing-business-activity.jpg)

3/CHINA’S LIQUIDITY TRAP

More rate [cuts loom in China](https://www.financedigest.com/lighting-maker-signify-cuts-2022-outlook-again-on-china-business-lighting.html "Lighting maker Signify cuts 2022 outlook again on China, business lighting"), but analysts and investors doubt they will give any support to an economy ravaged by a property crisis and strangling COVID-19 lockdowns.

The People’s [Bank of China sets the so-called Loan Prime Rate](https://www.financedigest.com/bank-of-england-set-to-hike-to-4-as-rate-peak-looms.html "Bank of England set to hike to 4% as rate peak looms") for one-year and five-year borrowing on Monday – the basis for business loans and mortgages, respectively – after recently surprising markets by cutting key bank lending rates.

The move stoked [slowdown fears](https://www.financedigest.com/logitech-quarterly-sales-fall-22-as-slowdown-fears-bite.html "Logitech quarterly sales fall 22% as slowdown fears bite") that sent the yuan sliding to a two-month low.

The PBOC is prodding [banks to lend](https://www.financedigest.com/post-crash-banking-regulation-is-transforming-the-world-of-corporate-lending-for-the-better.html "Post-crash banking regulation is transforming the world of corporate lending – for the better") more, and pouring money into the financial system. But demand to borrow simply is not there, with corporates fretting about the economic outlook and consumers wary with [property prices](https://www.financedigest.com/immediate-lift-of-oxford-property-prices-to-result-from-new-direct-high-speed-rail-connection-with-london.html "“Immediate lift” of Oxford property prices to result from new direct high speed rail connection with London") plunging.

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/08/Demand-slump.jpg)

4/PRICE POINTS

With markets twitching on any inkling that [surging inflation](https://www.financedigest.com/boes-bailey-speaks-about-surging-inflation-and-rate-hikes.html "BoE’s Bailey speaks about surging inflation and rate hikes") has peaked or remains at four-decade highs, the U.S. Federal Reserve’s preferred measure of prices is due on Aug. 26.

The release of the personal consumption expenditures price index for July comes after another key inflation measure, the consumer price index, was flat on a monthly basis in July, the largest month-on-month deceleration of price increases since 1973, a result that heartened [stock investors](https://www.financedigest.com/uk-stocks-slip-as-rate-hike-worries-grip-investors.html "UK stocks slip as rate hike worries grip investors").

In the 12 months through June, the PCE price index advanced 6.8%, the [largest increase since](https://www.financedigest.com/dash-unveils-largest-software-upgrade-since-inception.html "Dash unveils largest software upgrade since inception") January 1982.

With recession fears lingering and [investors eager for any clues](https://www.financedigest.com/oil-steadies-after-dipping-on-china-outlook-investors-await-fed-clues.html "Oil steadies after dipping on China outlook; investors await Fed clues") about the economy’s strength, data on new home sales hits on Tuesday and durable goods on Wednesday.

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/08/Has-US-Inflation-Peaked.jpg)

5/SIX MONTHS OF WAR

Wednesday marks the six-month anniversary of Russia’s invasion of Ukraine, or [special military operation as Moscow called](https://www.financedigest.com/four-european-countries-call-for-special-treatment-of-defence-in-eu-debt-rules-document.html "Four European countries call for special treatment of defence in EU debt rules – document") it.

Not only has it been a humanitarian tragedy and plunged the world into a new Cold War, it has also been a key driver of mounting recession worries, especially in [Europe where a gas crisis](https://www.financedigest.com/europes-energy-crisis-and-the-nuclear-path-out.html "Europe’s energy crisis and the nuclear path out") looms large.

The region’s gas [prices have nearly tripled since](https://www.financedigest.com/birmingham-led-uk-house-price-growth-since-brexit-vote.html "Why has Birmingham led UK house price growth since the Brexit vote?") June alone. Rationing in powerhouse economies like Germany may well be needed, but the ECB, [Bank of England and others are adamant they simply must crush the inflation](https://www.financedigest.com/bank-of-england-raises-rates-to-3-5-says-inflation-has-peaked.html "Bank of England raises rates to 3.5%, says inflation has peaked") it is fuelling.

Other highly [sensitive markets](https://www.financedigest.com/pressure-sensitive-tapes-market-to-register-substantial-expansion-by-2019-2027.html "Pressure Sensitive Tapes Market to Register Substantial Expansion by 2019-2027") have proved remarkably elastic. Wheat and corn – of which Ukraine and [Russia are both huge suppliers – have swooped right back](https://www.financedigest.com/russia-sharply-scales-back-far-east-war-games-with-china.html "Russia sharply scales back Far East war games with China") down, while Moscow’s main source of income, oil, is now selling for less than when the invasion started.

![](https://www.globalbankingandfinance.com/wp-content/uploads/2022/08/Six-months-of-the-Ukraine-war.jpg)

(Compiled by Lewis Krauskopf in New York; Editing by Matthew Lewis)


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