Janet Yellen at centre stage as rate decision looms.

Hint on rates?

OTTAWA • Being the top monetary policymaker in the world’s biggest economy helps to focus an audience’s attention — even when the collected group includes many of the world’s most high-profile financial players.

So you can bet all eyes will be on Janet Yellen, U.S. Federal Reserve chairwoman and keynote speaker at the annual Economic Policy Symposium in Jackson Hole, Wyo. She passed on the symposium last year, but might now feel the time is right to drop some hints on the next interestrate move and possible policy shifts by the central bank.

Yellen’s choice of words on Friday will be all the more significant as the Fed weighs the pros and cons facing the U.S. economy and whether another rate increase — a process stalled by domestic and global uncertainties — should come later.

There are few hints in the title of her speech — “The Federal Reserve’s Monetary Policy Toolkit” — broad enough to allow her to unleash more than a few trial balloons ahead of the U.S. central bank’s September meeting.

Scheduled for 10 a.m. EDT, Yellen’s address will come an hour and a half after the latest revised U.S. GDP data is released. Expect a lot of questions on a range of topics from the audience — which will include other central bankers (yes, Canada governor Stephen Poloz will be there, but he is not scheduled to speak), as well as economists and academics.

Last year’s speakers included Bank of England governor Mark Carney, who used to head Canada’s central bank, and central bankers from the European Union, Switzerland, India and Chile.

Analysts have for weeks been weighing in on the direction Yellen’s speech might take. Given that some Fed members have recently commented publicly that a rate hike could come as early at the Sept. 20-21 meeting — when the central bank’s decision-making Federal Open Market Committee next meets — such speculation is not surprising.

“Really, the focus is on Yellen speaking at Jackson Hole on what the thinking is around the Fed, given that we’re in a low-interest-rate environment, (and) that we’re in a low-growth, lowproductivity environment and what that means for monetary policy,” said Emanuella Enenajor, senior economists at Bank of America/ Merrill Lynch in New York.

“These are issues that, perhaps, are more relative for monetary policy a few years out, than today,” Enenajor said. “But it will be interesting to see if there is any allusion, not just from Yellen but to other speakers, as to whether there is any sense of a near-term outlook, as well.”

An option for Yellen would be to hold pat in September and also take a pass on any decision at the Nov. 1-2 policy meeting — not scheduled to be followed by a news conference — and move to tighten the Fed’s trendsetting rate at the Dec. 13-14 session. Any increase would be 25 basis points, which would take the lending level to between 0.5 and 0.75 per cent.

Of course, that fits the popular scenario of pushing back the decision until after Nov. 8, the date of the U.S. presidential election, to give the next incumbent time to become acclimatized to any rate policy change before starting the new job.

AN OPTION FOR YELLEN WOULD BE TO HOLD PAT IN SEPTEMBER.