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Fed Meeting at Jackson Hole Often Brings Market Fireworks; Here's What to Expect

Thursday, Aug. 22 marks the start of the annual Fed meeting at Jackson Hole, WY – although this one will be much different than those of years past…

Every year since 1981, the U.S. Federal Reserve Bank of Kansas City has invited a slew of economic luminaries to its annual symposium in tony Jackson Hole.

The Jackson Lake Lodge, nestled among two lakes on the Willow Flats that front the imposing Teton Range, can host central bankers from any one of the world's largest economies, as well as cutting-edge economic thinkers and theorists from global academia.

Global market- and bank-watchers look to the Fed meeting at Jackson Hole as a source of critical information regarding potential shifts in macroeconomic policy.

Investors look to the meeting to bring a healthy, if fleeting, shot in the arm to the markets and share prices. Nearly any unexpected remark or errant word coming from the proceedings has the ability to rock the markets.

Money Morning Chief Investment Strategist Keith Fitz-Gerald, despite making the most of this 54-month bull market, has laid much of the credit (or perhaps blame) at Ben Bernanke's feet. Fitz-Gerald believes that the markets have come increasingly unglued from economic reality, and are really just responding to Bernanke's speeches – and, more importantly, his money-printing ways.

Editor's Note: Ben Bernanke's printing presses are still running… for now. But we figure you've only got a few months before he pulls the plug for good, and the market's go on a death spiral. Money Morning's top experts put together a "safety plan" you can use to protect your wealth right away.

A look at how the markets have reacted to Fed meetings at Jackson Hole, plus FOMC statements/Bernanke press conferences, shows just how powerful these pow-wows can be…

Market Love for Jackson Hole Fed Meeting Goes Way Back

This Bernanke-induced rally may have been ongoing for 54 months, but a look back at the post-symposium market bump suggests that the markets just may have begun their infatuation with all things Fed quite a bit earlier than that…

Ben Bernanke, the Fed's chairman and the markets' psychological obsession, has spoken at every Jackson Hole meeting since he took over the chairmanship. In each year, with each speech given, the Dow has experienced triple-digit jumps:

  • 119 points in 2007
  • 197 points in 2008
  • 155 points in 2009
  • 164 points in 2010
  • 134 points in 2011
  • 151 points in 2012

Perhaps unsurprisingly, in each instance but one (in 2009, when he announced the worst of the Great Recession was over), Bernanke spoke about or reiterated the Fed's willingness to intervene in difficult economic circumstances. These words were promptly followed up with a demonstration, most recently with the never-ending rounds of quantitative easing.

Clearly, the markets love this talk, and they have for quite some time.

So, what can we expect at this meeting?

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