this thread is liable to run all weekend as the Jackson Hole international central bankers' meeting unfolds. But for starters ...
(snip)" Aug. 27 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke and European Central Bank President Jean-Claude Trichet, who united to fight the worst global recession in six decades, may be diverging over the outlook for their economies.
The Bernanke-led Fed, while saying U.S. growth would be slower than anticipated, announced on Aug. 10 it will buy Treasuries to set a $2.05 trillion floor on its balance sheet and keep interest rates from rising. Trichet said Aug. 5 that the euro-area economy was surpassing forecasts, which may pave the way for the ECB to look at phasing out its emergency lending measures.
Any transatlantic divide may be on display when the two central bankers address the Fed’s annual symposium in Jackson Hole, Wyoming. Their attitudes contrast with the second quarter, when the European fiscal crisis forced Trichet to buy government bonds for the first time and Bernanke discussed how and when to cut the Fed’s balance sheet.
Now the ECB is “actually looking to the timing of an exit policy, whereas the Fed has obviously put that on the back burner,” Mickey Levy, chief economist at Bank of America Corp. and a Jackson Hole regular, said in a Bloomberg Radio interview with Tom Keene. “The U.S. economy right now is in a soft patch and feels fragile, while in the aggregate the European economies have seemingly weathered the storm much better than people expected.”
Trichet’s optimism and Bernanke’s caution could strengthen the euro against the dollar, said Julian Callow, chief European economist at Barclays Capital in London. The dollar slid 0.5 percent yesterday in New York to $1.2719 per euro.
‘Inflation Entrenched’
“The ECB instinctively wants to anticipate a normalization of inflation, whereas the Fed would rather see inflation entrenched before normalizing policy,” said Callow, a former Bank of England economist. “The ECB seems to be viewing the world more optimistically and the Fed more pessimistically.”
The Kansas City Fed brings monetary policy makers and economists from more than 40 nations to the Jackson Lake Lodge for debates and hikes in the shadow of the Teton mountains. Bernanke will have his first public chance to defend the Aug. 10 decision and discuss his outlook when he speaks at 10 a.m. New York time. After a morning of presentations and discussions on economic issues, Trichet follows with a speech over lunch at 2:50 p.m.
Bernanke is likely to elaborate on how much Fed officials or staff economists have reduced their forecast for 2011 growth and provide “some degree of clarity” on possible plans for injecting more monetary stimulus, Paul McCulley, managing director at Pacific Investment Management Co., said in a Bloomberg Radio interview.
“The equity market may make a very loud noise in the negative direction” if Bernanke fails to deliver a clear message, McCulley said."(snip)



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