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The Fed has cancelled the US economic policy conference in Jackson Hole and will instead be held online on 27 August. Here's why investors should pay attention.

On Friday, the Federal Reserve Bank announced on its website that the Fed is cancelling its planned annual US economic policy conference offline in Jackson Hole, Wyoming, citing health risks from COVID-19. The conference will be held online on 27 August.

This could be a signal to Wall Street that the Fed sees an increased threat from a new wave of COVID-19 Delta strain disease.

Economists, market analysts and investors have been following statements by Fed officials for months about whether the central bank will adjust its monetary policy.

Earlier, Fed Chairman Jerome Powell stated that "each successive wave of Covid disease that has occurred over the past few months has tended to have less economic impact".

However, he also acknowledged that a full economic recovery in the US would depend on the trends of new COVID-19 strains such as Delta.

The latest data from the US Transportation Security Administration and data from OpenTable's restaurant booking analytics suggest that mobility among Americans has declined. This could suggest that consumer spending in the US, which accounts for a third of the country's economy, could be affected by concerns about the Delta strain and a new rise in disease incidence. The US labour market has recovered at a stronger pace in recent weeks as people have started to return to work, including after the pandemic supplemental unemployment benefits expired.

Economists are hoping for a significant surge in hiring in September with the start of schools, but if quarantine measures go back into effect, it will make it harder for the labour market to recover.

Minutes of the July Fed meetings showed that central bank governors were actively debating whether, when and at what pace to start reducing asset purchases. However, due to new threats of COVID-19, officials may be inclined to postpone these cuts.