Swimming bull

The annual Jackson Hole summit, which started yesterday, is closely watched by investors, as is the case whenever monetary policy issues become particularly important for financial markets. This event is organized each year by the Kansas City Fed in this small town in Wyoming, where the world's leading monetary policy makers fly in for few days. The 2021 edition should give clues as to when the Fed will start tapering.

While it has not yet provided a precise timetable, it made it clear that it will happen sooner rather than later, barring an unforeseen deterioration of the economy, both in terms of employment and growth and of course the health situation. Economists believe a decision will be made between the Jackson Hole symposium and the Fed's September 21-22 policy meeting.

Currently, the buyback program reaches $120 billion per month. The envelope is expected to be reduced gradually, perhaps starting at the end of the year, which is a bummer for investors who are used to swimming in a pool full of liquidity.

How can the Fed reduce support without penalizing financial markets too much? That is the question.

How to empty the cash pool? (By Amandine Victor)