According to Jinshi Data on August 17, the theme of this year's Jackson Hole Central Bank Annual Meeting is "Reassessing the Effectiveness and Transmission of Monetary Policy." The meeting will discuss the strong momentum of the U.S. economy despite interest rate hikes of more than 5 percentage points, as well as its defiance of numerous recession forecasts.
The impact of monetary policy on the real economy is likely to be less significant than in past interest rate cycles, both due to the legacy of the low interest rates that prevailed from 2009 to 2022 and due to structural changes in the economy.
Millions of homeowners still hold 30-year mortgages with interest rates below 4%, and businesses are similarly taking advantage of ultra-low interest rates to refinance and extend loan maturities before rates rise. In fact, many of the largest U.S. companies are net interest earners.