Newsquawk Fed Speak Primer for the Week:

Analysis details (13:28)

Schedule

Tuesday:

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  Kansas City Fed's Schmid (2025 voter) speaks on the economic and monetary policy outlook at 00:40 GMT (Tue) / 19:40 EST (Mon)


• 
  Fed Vice Chair of Supervision Barr (permanent voter) speaks virtually on "Counterfeit Credit Risk" at NY Fed event at 13:05 GMT / 09:05 EST

Wednesday

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  Atlanta Fed's Bostic (2024 voter) to speak on monetary policy and the economic outlook at 17:00 GMT / 12:00 EST


• 
  Boston Fed's Collins (2025 voter) takes part in fireside chat at 17:15 GMT / 12:15 EST


• 
  NY Fed's Williams (permanent voter) partakes in a hybrid economic briefing in Long Island at 17:45 GMT / 12:45 EST

Thursday

• 
  Atlanta Fed's Bostic (2024 voter) to speak on the economic outlook, monetary policy and the state of the banking industry at 15:50 GMT / 10:50 EST


• 
  Chicago Fed's Goolsbee (2025 voter) speaks virtually on "Monetary Policy at an Unusual Time" at 16:00 GMT / 11:00 EST


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  Cleveland Fed's Mester (2024 voter) speaks on Financial Stability/Regulation at 18:15 GMT / 13:15 EST

Friday

• 
  NY Fed's Williams (permanent voter) participates in a moderated discussion before the hybrid Citizens Budget Commission 92nd Annual Gala at 01:10 GMT (Fri) / 20:10 EST (Thu)


• 
  Fed Governor Waller (permanent voter) & Dallas Fed's Logan (2026 voter) speak at a monetary policy forum at 15:15 GMT / 10:15 EST


• 
  Atlanta Fed's Bostic (2024 voter) speaks on the economic outlook and real estate at 17:15 GMT / 12:15 EST


• 
  San Francisco Fed's Daly (2024 voter) and Kansas City Fed's Schmid (2025 voter) speak on AI and the labor market at 18:30 GMT / 13:30 EST


• 
  Fed Governor Kugler (permanent voter) speaks on pursuing the dual mandate at 20:30 GMT / 15:30 EST

Focus Points

Rate Cuts: As the case with all recent Fed Speak, we are still eyeing for clues on when the Fed's First rate cut will take place. Analysts are currently split on the timing of the first rate cut with March now all but ruled out by the Fed as it would be too soon. A slim majority of those surveyed by Reuters (53/104) expect the first rate cut to take place in June, while 33 analysts expect the first cut to come in May (the remainder expect sometime in H2). On the rate path, the December Summary of Economic Projections (SEPs or "Dot Plots") pencilled in three 25bp rate cuts for 2024, taking the FFR to 4.5-4.75% from the current 5.25-5.50%. Many on the Fed have said those dot plots remain an accurate picture of their current forecasts, but any nuances or changes on this language would be noteworthy. It is worth highlighting that the Fed is stressing a data-dependent approach, and would likely just suggest any outcomes will depend on the economic data and information available to them at the time. Therefore, it's like we will continue to hear the party line from Fed speakers this week in that they expect a rate cut "at some point this year" but that the strong economy and mixed inflation data gives them time to be "cautious", whilst warning about the risks of cutting too soon. 

Economic Data: The recent economic data has been hot, particularly the January CPI, PPI and NFP reports, the Retail Sales data was soft, however. The hot economic data, coupled with Fed Chair Powell's message at the January FOMC, has seen money markets largely price out any probability of a rate cut occurring in March, and similarly, none of those surveyed by Reuters expect a cut in March, vs 16 analysts in the prior survey. Some on the Fed in response to the data have warned of seasonality noise within the January figures, thus will be looking for more data down the line to help determine whether the path back to 2% has slowed, but many do expect it to be a bumpy and uneven road. Note, January Core PCE is due on Thursday where many expect an uptick to 0.4% M/M.

Balance Sheet: Any details from the Fed officials on the balance sheet may help shape balance sheet expectations/details. The latest FOMC minutes revealed that reductions in the overnight RRP usage saw many officials state it would be appropriate to start in-depth balance sheet discussions at the next meeting (as expected). A few had said a balance sheet runoff could continue after rate cuts began and some said slowing the pace of the balance sheet runoff could help smooth the transition to ample reserves, and could allow the balance sheet runoff to continue for longer. 

For all recent Fed speak, please refer to the Newsquawk Hawks and Doves.

26 Feb 2024 - 13:28- Fixed IncomeData- Source: Newsquawk