Fedspeak

A quiet week of Fedspeak, with Waller and Bostic expressing disappointment in the September inflation data.

With fears of rising unemployment falling a bit with the September jobs data, the Committee's focus shifts back a bit towards inflation. As with before the September rate cut, the Committee is divided in its confidence around inflation's path back to 2%.

We had some Fedspeak this week but mostly people stuck to their previous views.

With labor market risk rearing its head, Kashkari and Bostic sound dovish again.

A little bit of post-game analysis from Bowman and Waller. Waller defends 50 by pointing to the implications of the CPI and PPI data received during blackout period for core PCE.

Our new baseline is a 50 bps cut with a total of 75 bps of cuts in the SEP for 2024. It’s a close call but we think a 50 bps cut is more likely than a 25 bps cut. We think a 50 bps point cut is the right move.

It's the last week of Fedspeak before the blackout period for the September meeting. Everyone speaking this week is on board with Powell's assessment that the labor market is at least balanced.

A quiet week after Jackson Hole. What we did hear this past week showed that Powell has some convincing to do on the Committee.

Almost as notable as the things Powell said were the things he did not. Between now and September, Fedspeak should focus on keeping the Committee’s options open to a 50 bps cut in September.