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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
Fed Chair Powell didn't deviate much from previous recent commentary in his appearance at a highly-anticipated Cato Institute event, referencing his Jackson Hole speech several times. September Fed hike pricing briefly edged higher (to just under 72bp, see chart), mainly because the Chair did nothing to push back against 75bp market pricing just prior to the FOMC blackout.
- Futures are now taking it as a given that 75bp is the path of least resistance for the meeting in 2 weeks' time, especially now the ECB's 75bp is out of the way, though of course CPI on Tuesday could throw up a surprise.
- While Powell addressed several "structural" topics (including on the framework, the dual mandate, the scarce reserves regime, cryptocurrency and other topics), ,market focus was on current policy matters. Some comments of interest included:
- On fighting inflation in order to keep expectations well-anchored: "We need to act now, forthrightly, strongly, and keep at it until the job is done."
- Says that longer-run infl expectations are "pretty well-anchored", but noted the "clock is ticking" re short-term expectations
- Says that history cautions against "prematurely" loosening policy
- On the last nonfarms payrolls report: Says there was a welcome increase in participation rate; nonetheless still 1 percentage point below pre-crisis
- Says that below-trend growth will bring the labor market into better balance
FOMC Sept 2022 OIS Implied Pricing Intraday (Times are BST)Source: BBG, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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