Ben Bernanke Is Missing Jackson Hole: Why?

TheStreet.com

NEW YORK (TheStreet) -- Federal Reserve Chairman Ben Bernanke is set to to miss the annual Jackson Hole Economic Policy Symposium in August because of a "personal scheduling conflict." With the forum becoming a market moving event in recent years, it's a curious decision. The question on everyone's mind is: why?

The symposium really became a market event under former Chairman Alan Greenspan and Bernanke has continued that tradition, throughout the economic crisis, and beyond. For him not to attend the event signals one of three things:

1. End/Tapering Of QE (Not Likely)

There's been a lot of talk in the marketplace recently about the ending, or tapering, of quantitative easing. Currently, the Fed is buying $85 billion per month in U.S. Treasuries and mortgage-backed securities, to not only lower employment (currently at 7.6% per the Bureau of Labor Statistics -- consistent with the Fed's dual mandate), but to stimulate the economy as well.

Recent economic data, such as the latest jobs report, sharply lower commodity prices, consumer price index, producer price index, and weekly unemployment claims have been weaker than expected. To me, and many others, that suggests the Fed is not going to step off the gas anytime soon.


The housing market has begun its road to recovery, with sales at 4.92 million units at a seasonally adjusted rate. While that's off the peak, it's still showing the signs of a healthy housing market. Despite the current strength, housing is still nowhere near where it was at its peak in the early to mid 2000's, and has a long way to climb.

Recent data put forth by Zillow show that approximately 13.8 million homeowners had negative equity, or were "underwater" at the end of the fourth quarter. That's down from 15.7 million in the same period last year, but it's still a huge number of homeowners, and is one data point that suggests the Fed isn't going to stop or taper its bond buying anytime soon. 2. Setting Stage For A Successor (most likely)

In the past, Bernanke has said he does not think he's the only person "who can manage the exit," when referring to the Fed ending its quantitative easing program and returning its balance sheet to pre-crisis levels.

Bernanke's term is set to expire in January 2014, and one name that's been tossed around as a potential successor is San Francisco Federal Reserve President Janet Yellen. Yellen, like Bernanke, is seen as dovish, and is willing to do whatever it takes to lower unemployment. In the past, Yellen has mentioned the possibility of keeping the Fed's policies in place until 2025. By skipping Jackson Hole, Bernanke may be subtly shifting the spotlight to Yellen.


In recent years, Jackson Hole has been the starting point for major market moving events. In 2010, Bernanke's remarks were taken as a sign the Fed would start its second round of quantitative easing. In 2011, Operation Twist was discussed, and last year, the Fed started its third round of quantitative easing in September. In December, the program was enlarged to include longer-term Treasuries as well, with the Fed buying its current $85 billion per month in securities.

The last time the chairman of the Fed did not address the conference was in 1988, when Greenspan held the chairmanship. 3. Something Else

There could be many reasons why Bernanke isn't attending Jackson Hole.

"It might mean that he's got a life," said Robert Brusca, chief economist of Fact & Opinion Economics.

Maybe the Fed's comment that Bernanke has a "personal scheduling conflict" can be taken at face value. Bernanke's decision to implement open-ended quantitative easing shortly after last year's Jackson Hole event came as an unprecedented move by a central bank.

He very well could have a wedding or other commitment, and assuming that the Fed may not scale back its stimulus programs, Bernanke could deem his attendance unnecessary.

"So what, he's going to go to Jackson Hole and everybody is going to ask him about tapering off?" said Brusca. "Maybe take a long overdue vacation with his family rather than to have a bunch of reporters dog him all meeting long at a place that's actually bucolic and beautiful to be at. And instead of him enjoying the experience, being hounded to death over whether the Fed's tapering off or not and having to guard every word he says at every minute, even when he thinks he's out on a trail hiking."

Maybe that's the case. I know I like to hike without distractions.

--Written by Chris Ciaccia and Joe Deaux in New York

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