The Fed and other central bankers from Asia and Europe gathered last week in one of the most beautiful places on the planet, Jackson Hole, Wyoming, for their annual retreat. Fed Chairman Ben Bernanke issued an optimistic economic outlook statement, but in his best double-speak he also warned that the economic recovery “is likely to be relatively slow at first, with unemployment declining only gradually from high levels.”
Also interesting is that these central bankers indulged in a bit of self-congratulation over what they had achieved since the financial crisis last fall, and the fact that they had prevented a new depression. However, these central bankers also had to focus on planning their next big task – to unwind most of the emergency measures they put in place to fight the global economic crisis.
Interestingly, one of the most conservative central banks, namely the European Central Bank (ECB), believes that emergency stimulus policies might still be necessary, despite the fact that its two biggest economies, namely France and Germany, posted positive GDP growth last quarter.