The feedback from Federal Reserve Chairman Jerome Powell on 60 Minutes set the tone for the week. I do not assume he stated something new however there was loads of speaking… and there may be lots extra to return.
I strongly suspect the Fed may reside with its present messaging and Fed funds futures pricing in a 16% probability of a March minimize and 115 bps this 12 months. They’re in a transparent wait-and-see mode however — alas — there is no ‘mute’ button on the Fed.
On Monday, we heard from Goolsbee (non-voter) and
Kashkari (non-voter). Goolsbee took a dovish tone and stated “if
we simply maintain getting extra knowledge like we have gotten… we must be properly on the trail
Nonetheless in an essay, Minneapolis Fed President
Kashkari wrote that “It’s potential, at the very least through the post-pandemic
restoration interval, that the coverage stance that represents impartial has elevated.”
I am undecided how a lot weight the phrase ‘potential’ is carrying there however the one interpretation there could be hawkish.
The day forward options:
- Mester – Midday ET (1700 GMT)
- Kashkari 1 pm ET (1800 GMT)
- Collins 2 pm ET (1900 GMT)
- Harker 7 pm ET (0000 GMT)
The market is clearly extra involved about hawkish rhetoric in the intervening time and that could be due to looming 10-year and 30-year auctions on Wed, Thurs. Nonetheless the momentum is clearly greater within the greenback and yields in order that’s a tricky fade, at the very least till some knowledge disappoints or CPI benchmark revisions on Friday are decrease.