Canadian Investment Review

Charts of the Week: Is Jackson Hole a Turning Point For Global Markets?

Written by Caroline Cakebread on Monday, August 28th, 2017 at 9:32 am

story_images_south-african-mountain-roadCentral Bank leaders meeting at this year’s Jackson Hole Summit are facing a very different economic and political landscape than they were in 2016 – and that will mean making some major decisions about the future of monetary policy post-2008.

Blogger Jeroen Blokland, who is also a portfolio manager at Robeco, has some ideas about what those policymakers will have on their minds during the two-day conversation. His post highlights six charts that will shape the future of monetary policy including these two charts that tell a story of bloated balance sheets, not just at central banks but among legions of ordinary consumers who’ve loaded up on cheap money and remain heavily indebted. It paints a stark picture of what the world looks like after 10 years of monetary easing – and the challenges policymakers face as they adjust to a new reality.

Blockland calls these charts (below) “scary” and while he sees much reason to be optimistic, he concludes that:

“Jackson Hole is likely a turning point in global central bank policy. The language will become less supportive, and not just from the Fed. This could very well lead to increased volatility and less abundant returns.”

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Read the full blog post here.

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