Fed Speak Primer: Plethora of Fed speak due before and after FOMC minutes

Fed Speak Primer

Schedule (BST / EDT)

• 13:00 / 08:00: Bostic (2024 Voter, Neutral) to give welcome remarks before the Greater Atlanta Home Builders Association monthly meeting, in Atlanta, Ga; Text: No, Q&A: No


• 14:15 / 09:15: Fed's Logan (2026 Voter, Hawk) to speak on the current state of the economy before the Future of Global Energy Conference; Text: Yes, Q&A: No.


• 15:30 / 10:30: Fed's Goolsbee (2025 Voter, Dove) to give opening remarks before hybrid Chicago Payments Symposium; Text: No, Q&A: No. 


• 17:15 / 12:15:  Fed's Barkin (2024 Voter, Neutral) to give welcome remarks before hybrid Chicago Payments Symposium


• 17:30 / 12:30:  Fed's Jefferson (Voter, Dovish) to speak on "The Discount Window, 1990-Present" before a Charlotte Economics Club Lunch; Text: Yes, Q&A: No. 


• 19:00 / 14:00: FOMC Minutes. Full Newsquawk preview available here.
  


• 22:00 / 17:00: Fed's Collins (2025 Voter, Neutral) to speak before the Worcester Regional Research Bureau 39th Annual Meeting, in Worcester, Mass; Text: Yes, Q&A: Yes. 


• 23:00 / 18:00: Fed's Daly (2024 Voter, Dovish) to participates in moderated conversation on monetary policy and the economic outlook at Boise State University; Text: No, Q&A: Yes. 

PRIMER

Since Fed Chair Powell guided us to two further 25bps rate cuts for 2024 (one in November, one in December), providing the economy evolves as expected, and since the very strong September NFP report, money markets have completely unwound bets for a 50bp rate cut from the FOMC. Nonetheless, some recently (like Kugler) have kept the options open for both slow and aggressive easing, depending on how the economy evolves. We will be looking to the Fed speak today to gauge their views on easing ahead and where they sit on the dot plots, as well as their views on the September jobs report. Note, some have expressed concerns over the economic impact of Hurricane Helene and Hurricane Milton - and it will be something to watch in the data ahead. If data ahead starts to deteriorate it may reignite 50bp calls, but also if it continues to show a solid, but cooling, labour market, 25bps rate cuts are the most likely action going forward. After the strong NFP report, Bank of America write that CPI is back in the limelight and sees M/M Core CPI of 0.3% on Thursday (above the 0.2% consensus), but writes it should still be enough to see the Fed cut by 25bps in November. 

Bostic has spoken several times since the latest FOMC, including since the latest jobs report, noting the labour market has slowed but it is not slow or weak, while he revealed his dot plot pencilled in just one further 25bp rate cut this year to 4.5-4.75% (vs median 4.4%), while he sees the end-2025 rate at 3.00-3.25%, a level Bostic sees at his estimate of neutral but beneath the Fed 2025 dot of 3.4%; he sees neutral above the Fed's median of 2.9%. 

We have not heard from Fed's Logan since July, so updated remarks on her economic and policy views will be key. 

Goolsbee and Barkin have both extensively since the FOMC meeting, while their speeches today will likely focus on payments given the title of their events, they may not discuss policy or the economic outlook. However, briefly recapping, since the NFP report Goolsbee has said to not get too worked up by any one month's report, but it was a superb jobs report but he warned the Fed have to be careful keeping rates as restrictive as they are. We haven't heard from Barkin since the NFP report, but in wake of the FOMC meeting, he stated that the pace and extent of rate-reduction cycle requires the Fed to be attentive to how the economy and inflation evolve. He sees two 25bps of rate cuts this year as a reasonable path, labelling current rate cuts as a proper recalibration of policy but a full normalisation would require inflation to hit 2%. He also warned that the last mile of inflation may still take longer than expected and he is worried price pressures could get stuck next year. 

Fed Vice Chair Jefferson is set to speak on the Discount Window. He spoke overnight on policy, noting the Fed rate cut recalibrated policy to maintain the strength of the labour market, adding economic growth is solid, inflation has eased substantially and the labour market has noticeably cooled. Jefferson acknowledged inflation is much closer to the 2% goal and he expects to continue to make progress towards it. He echoed the Fed's statement that the balance of risks to Fed's two mandates has been brought roughly into balance. Looking ahead, he will watch incoming data, the evolving outlook, and balance of risks in considering additional policy rate adjustments, echoing Powell in the FOMC Presser that he is to make decisions meeting by meeting.

Collins has also spoken since both the NFP and FOMC, noting further rate cuts are likely needed and future action is to be data-driven. Daly meanwhile has not spoken since the FOMC or NFP so we will be looking for her updated views on the economy and policy. 

09 Oct 2024 - 13:09- Fixed IncomeData- Source: Newsquawk