It is not that long ago that many investors would have hardly batted an eyelid over news that a bunch of global central bankers are meeting. The troubled economic situation in the last few years and the more active role of central banks to rectify this has however changed all that, so all eyes this week are definitely on the meeting of global central bankers at Jackson Hole in the U.S. and in particular what will or won’t Federal Reserve Chairman Ben Bernanke say. Steen Jakobsen, chief economist, Saxo Bank, gives his take on market expectations and what the likely outcome from the meeting will be.

Last year Ben Bernanke took the world by surprise by announcing a second round of Quantitative Easing at this meeting in a mountainside retreat, and with growing concerns about a possible double dip recession the precedent is really set for something big this time too. According to Steen, Bernanke’s main focus is to avoid a “Japanisation” – a deflationary environment with low growth and low interest rates through more of the same monetary policy i.e. a Quantitative Easing 3 or Operation Twist, or maybe even both.

It’s clear from recent data that the U.S. economy needs a helping hand and some form of intervention in the fourth quarter. Despite criticism that QE2 was a failure Steen expects Bernanke, whose reputation is as such on the line, to continue to defend the easing concept along the lines of: without it the situation would have probably been much worse.

Ben Bernanke’s press conference will be followed by one from Jean-Claude Trichet, the European Central Bank President. He is expected to also defend the bank’s actions in raising rates despite criticism that these have been out of sync with the economic reality of Europe. The hope, according to Steen, is that Trichet can now set some real direction in terms of starting a constructive process to solving the Eurozone’s economic woes. Such a process should hopefully lead the Eurozone towards more solidarity and consolidation and replace the fruitless political battles which to an extent have achieved the exact opposite.

For more comments by Steen Jakobsen see his blog Steen's Chronicle on TradingFloor.com .