JACKSON HOLE, Wyo. — Federal Reserve Chair Jerome Powell might be the center of attention this morning at the central bank’s exclusive monetary policy conference in the mountains, but Thursday was mostly about soaking up the rays and going hiking in picturesque Grand Teton National Park. The annual Jackson Hole gathering is an amusing combination of high-ranking officials and chill vibes. It’s where you might see men in suits huddling over the long-term path of interest rates or Minneapolis Fed President Neel Kashkari’s 4-and-a-half-year-old daughter, Uly, singing “Let It Go” with a light-up mic. And then there were the Irish guys in fur coats who were on their way to the “Burning Man” concert, reporters at Reuters told MM. Since this is still nerd central, there was also time for informal policy chats at Jackson Lake Lodge. The conversations focused on how far the Fed might go in reverse to cut rates once its inflation fight is over — or what it might mean if rates remain significantly above zero for the foreseeable future. Those questions are top of mind for the conference’s very global attendee list, which includes officials from throughout Europe and from countries like South Korea, New Zealand, Japan, Colombia, Thailand and Israel. But the local surroundings also have relevance to monetary policy, from issues like labor supply to concerns about rising rents. “In a lot of places, like Jackson, it’s too expensive to live here,” said Nela Richardson, chief economist at ADP. “So they can’t get people in certain capacities like waitstaff.” More generally, Richardson warned that the lack of housing affordability nationwide might keep inflation higher, and therefore interest rates as well. “It is the juggernaut that keeps inflation elevated,” she told MM. “Even if [inflation] comes down, you have to be watchful because it’s not just whether it comes down, it’s, how likely it will be to go back up.” She called for a stronger housing policy at the federal level to combat supply problems. Richardson, who previously worked at Redfin and at Freddie Mac, noted that Fed policy historically works particularly through the housing market because it’s more sensitive to shifts in rates than most other industries. “It’s not doing that anymore,” she said. “The housing market isn’t playing its part.” Julia Coronado, president of MacroPolicy Perspectives, was less convinced, pointing to a lot of apartment building construction in the pipeline that will come online and help bring down rents. “It seems like we probably have another leg of adjustment,” she said. Those are the kinds of questions that Powell will have to wrestle with when he addresses the world today. IT’S FRIDAY — What should I do if I see a bear? Send tips, gossip and suggestions to Victoria at vguida@politico.com and Sam at ssutton@politico.com.
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