In Jackson Hole, where central bankers and leading economists from around the world are gathering for an annual meeting hosted by the Kansas City Fed, the talk is about the economy, what Fed Chairman Ben Bernanke will signal in his highly anticipated speech on Friday and what Warren Buffett’s purchase of a stake in Bank of America might mean for the beleaguered bank.
Here’s a smattering from interviews on the sidelines of the meeting, which begins in earnest with a formal dinner tonight:
– “QE3 is not in the cards, so don’t expect that,” Bank of America economist Mickey Levy told Reuters Insider, referring to the possibility of a third round of bond-buying by the Fed. Instead, the Fed may aim to reduce long-term rates by replacing some of the shorter-term securities in its portfolio with longer-term assets, he said.
– John Silvia, an economist at Wells Fargo Securities, said such a step would be a “small move,” and suggested that with three dissenting votes on the Fed’s policy-setting panel Bernanke would be more likely to go slow than fast. “Three dissents do matter,” he said.
– Carnegie Mellon professor and Fed historian Alan Meltzer, who has attended nearly every annual Jackson Hole meeting since its inception 29 years ago, suggested there’s about as little Bernanke can do about the economy as about the torrential downpour that drenched the mountain valley minutes before his interview.