, Columnist
As Jackson Hole Starts, Emerging Markets Lose Faith in the Fed
Once a beacon of stability, the U.S. has become a source of tumult. Markets now give global central bankers a clearer read on the economy.
Steer that narrative.
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In the past, emerging markets looked to the Federal Reserve for cues about monetary policy. Increasingly, they’re turning to the yield curve. Chairman Jerome Powell must regain control of the narrative at Jackson Hole this weekend before his equivocation leads to deeper turmoil in developing economies.
On Thursday, Bank Indonesia cut its benchmark policy rate by 25 basis points to 5.5%, the second consecutive maneuver after starting an easing cycle in July. Most economists polled by Bloomberg had expected the central bank would hold.