The Fed Opens Its Jackson Hole Conference With Interest Rate Path in Focus

The Fed Opens Its Jackson Hole Conference With Interest Rate Path in Focus By James Christie

Good day. Federal Reserve officials today kick off their annual Jackson Hole Economic Symposium, an event hosted by the Kansas City Fed and regarded by many as the Super Bowl of central banking, Nick Timiraos of The Wall Street Journal writes. We feature his take on what to expect at this year's conference, which comes as global central bankers are weighing whether or how much more they need to raise interest rates to vanquish inflation. Last year, Fed Chair Jerome Powell delivered a speech in which he promised to beat down inflation even at the cost of a recession. The Fed chief is set to speak Friday on the economic outlook, and investors are likely to parse his every word for clues about where U.S. interest rates are headed.

Now on to today's news and analysis.

Top News No Invitation to the Fed's Mountain Retreat? Here's What to Watch

Federal Reserve officials return to Grand Teton National Park on Thursday for their annual economic symposium with a slightly brighter economic backdrop than the one they faced last year.

They have lifted interest rates to a 22-year high in the most aggressive sequence of rate increases in 40 years to battle inflation, which has retreated from four-decade highs. But the U.S. economy remains surprisingly resilient-with the unemployment rate at 3.5%, essentially unchanged over the past year-and so-called core inflation, which excludes volatile food and energy prices, is nearly double the Fed's 2% target.

Here's what to watch at the Jackson Hole policy conference.

U.S. Economy GOP Presidential Hopefuls Inflict Damage on Each Other, Spare Trump

The large field of Republican presidential hopefuls gave Donald Trump what he wanted in their first debate: two hours of infighting and bickering and only brief criticism of the absent front-runner.

Tracking the Charges in Trump's Indictments Arizona Labor Spat Signals Challenges for U.S. Chip Manufacturing

A labor tussle at an Arizona semiconductor-plant construction site points to one of the thornier challenges facing the U.S. as it moves to revive domestic chip manufacturing: ensuring there are enough skilled workers to meet demands .

How Oil and Tech Giants Came to Rule a Vital Climate Industry

The technology to remove carbon from the atmosphere is unproven at scale and the economics are just taking shape. What is clear is that carbon removal is now the realm of giant companies and big government support.

The Mystery of the Missing Philadelphia Office Workers

The majority of office workers in and around Philadelphia continue to work remotely much of the time. Only Silicon Valley tech workers go to their San Jose, Calif., offices less compared with prepandemic office-use rates.

Office Tenants Are Renewing Leases-But for Far Less Space Key Developments Around the World China, Russia Deliver Broadsides Against the West at Brics Summit

Russia and China used a summit of countries known as the Brics to air their grievances against Western powers, present themselves as defenders of developing economies and set out the case for an alternative international order .

Iran, Saudi Arabia, Others Invited to Join Brics Group China Casts CIA as Villain in New Anti-Spying Push

Chinese leader Xi Jinping is expanding a campaign to harden the country against foreign efforts to steal its secrets , with his spymasters warning citizens abroad to guard against enticement from the CIA.

Japan Starts Releasing Fukushima Nuclear Plant Water Into Pacific

Japan began discharging slightly radioactive wastewater from the Fukushima Daiichi nuclear plant on Thursday, prompting China to suspend the import of all Japanese fish and other aquatic products.

Wagner Mercenary Chief Prigozhin Dies in Russia Plane Crash

Wagner paramilitary group owner Yevgeny Prigozhin, who led a short-lived uprising in June that challenged Russian President Vladimir Putin's authority, was killed in a plane crash , according aviation authorities in the country.

The Global Race to Water at the Moon's South Pole

India became the first country to land at the moon's south pole -an achievement expected to kick off a new era of space exploration. It joins the U.S., China and Russia in successfully pulling off an uncrewed lunar landing.

Financial Regulation Roundup SEC Takes On Private Equity, Hedge Funds

Wall Street's main regulator approved sweeping new rules aimed at overhauling the way private-equity and hedge funds deal with their investors, one of the biggest regulatory challenges in years to firms such as Blackstone and Citadel.

Alleged Founders of Tornado Cash Charged With Money-Laundering

U.S. prosecutors charged two individuals allegedly behind decentralized cryptocurrency mixer Tornado Cash, Roman Storm and Roman Semenov, saying they conspired to launder illicit funds and to violate U.S. sanctions.

Forward Guidance Thursday (all times ET)

Time N/A: Federal Reserve Bank of Kansas City's Jackson Hole Economic Symposium

8:30 a.m.: U.S. durable goods advance report for July; U.S. weekly jobless claims; Chicago Fed National Activity Index

Friday

Time N/A: Federal Reserve Bank of Kansas City's Jackson Hole Economic Symposium

10 a.m.: University of Michigan consumer survey, final for August

10:05 a.m.: Fed's Powell speaks at Federal Reserve Bank of Kansas City's Jackson Hole Economic Policy Symposium

3 p.m.: European Central Bank's Lagarde speaks at Kansas City Fed's Jackson Hole Economic Symposium

Research Jackson Hole May Reveal Potential Divergence Between Central Banks

This year's Jackson Hole economic symposium may provide an early indication of the scale of the potential divergence between central banks, Richard Flynn, managing director at Charles Schwab U.K., writes in a report. The interest-rate rise cycles for the biggest central banks, the Federal Reserve and the European Central Bank, appear to be over, he writes. "Policy is now diverging, with the Bank of Brazil and other emerging-market economies starting to cut rates, joining the People's Bank of China in more accommodative monetary policy," he writes. Flynn adds that the Reserve Bank of Australia is on pause and the Bank of England is likely to continue to raise rates.

-Emese Bartha

Commentary How High a Rate Can Housing Take?

The highest mortgage rates in a generation should be crushing America's home-building sector, but they are helping it for now -a bright spot for the U.S. economy, Justin Lahart writes.

Department Stores Are Maxed Out

A spending slowdown by American consumers is really raining on department stores' parades, and unfortunately this feels more like a worsening storm than a fleeting cloud, Jinjoo Lee writes.

Basis Points Business activity in the U.S. rose at a weaker pace in August, as it teetered near stagnation across the private sector, according to the S&P Global Flash Composite Output Index. The gauge of activity in the manufacturing and services sectors fell from 52.0 in July to 50.4 this month, its lowest level in six months. The reading suggests economic output is expanding, but only marginally, as it came in just above the 50 no-change mark. (Dow Jones Newswires) Sales of new single-family houses in the U.S. rose in July, beating economists' forecasts, according to Commerce Department data. Sales rose 4.4% in July from June and 31.5% from a year earlier to a seasonally adjusted annual rate of 714,000. Economists polled by The Wall Street Journal expected sales to rise to an adjusted 704,000. June's rate was revised from 697,000 to 684,000. (DJN) Retail sales in Canada edged up 0.1% in June from the previous month to a seasonally adjusted 65.92 billion Canadian dollars, the equivalent of about $48.64 billion, Statistics Canada said Wednesday. Sales ticked higher for a second straight month, bolstered largely by car dealers that made up for weakness elsewhere and flattening sales volumes. (DJN) South Korea's central bank stood pat on interest rates for a fifth straight time as widely expected and maintained its 2023 economic growth and inflation forecasts. Indonesia's central bank held interest rates steady as expected during its August policy meeting in an effort to ensure that inflation remains under control and on target. Confidence among French manufacturers fell well below its long-term average in August as demand weakened in the eurozone's second-largest economy. (DJN) Zambia's central bank hiked its key lending rate on Wednesday for the second time in a row by 50 basis points to 10%, citing spiraling inflationary pressure in Africa's second-top copper and cobalt producer. (DJN) Feedback Loop

This newsletter is compiled by James Christie in San Francisco and Perry Cleveland-Peck in Barcelona.

Send us your tips, suggestions and feedback. Write to:

James Christie , Nell Henderson , Nick Timiraos , Tom Fairless , Megumi Fujikawa , Perry Cleveland-Peck [mailto:perry.cleveland-peck@wsj.com], Nihad Ahmed , Michael Maloney , Paul Kiernan

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08-24-23 0715ET