NEW YORK (TheStreet) -- In the past, the Federal Reserve's Jackson Hole Symposium produced some new and controversial proposals. Two years ago, for example, then-Fed Chairman Ben Bernanke introduced QE3--and the financial markets loved it. So what can we expect from this year's symposium?
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Given the stances that Janet Yellen has taken throughout her short tenure as chairwoman, it would be very surprising if she didn't use Friday's speech to justify continued zero interest rate policies (ZIRP) and insist that the Fed's monetary policy tools aren't for market stabilization (i.e., "macroprudential" policies are for that). Let's look at the evidence.
At the end of June, the Bank for International Settlements (BIS), the central bank for central bankers, put out a report saying that the world's leading central banks should not fall into the trap of raising rates "too slowly and too late," adding that "the risk of normalizing [interest rates] too late and too gradually should not be underestimated."
The Deal's Paula Schaap spoke with economist David Levy on what he thinks we're likely to hear from Fed Chair Janet Yellen:
The BIS said governments should promote policies that boost their economies, like removing obstacles and rules regarding hiring and firing (e.g., Southern Europe) like Germany did some 20 years ago, structurally reform their tax codes (e.g., U.S.), strengthen the capital base of their banking system (e.g., Europe), and encourage capital formation.
Fed's Answer: "No Way"