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Good morning. Central banks stand divided ahead of Jackson Hole. Stocks extend gains. And a Gaza peace deal may be looming. Here’s what people are talking about.
Central bankers gathering for one of the world’s most prominent annual economic forums are set to find themselves more divided than perhaps any time since before the pandemic. For years, assessments at the Federal Reserve, European Central Bank and a swath of their developed-world peers were much the same. When Covid struck, they slashed interest rates and when it became clear a subsequent bout of inflation wasn’t going away, they implemented aggressive tightening campaigns. Today, there’s more distance among the group. While the ECB already cut its benchmark rate --and Governing Council Member Olli Rehn sees room for more -- the Fed has yet to pull the trigger. The BOE moved on Aug. 1, but only by a knife-edged 5-4 vote. And Australia’s central bank has cited critics on both sides of the debate. Still, option traders are betting Jerome Powell will reinforce the case for cuts at the Jackson Hole gathering this weekend and are positioning for further dollar losses.
See George Lei’s outlook for the greenback below.