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(Z1) Bear Trend Sequence Intact


WTI Topples $75/bbl Handle


Issuance Plan Eyed


Commodity Related Currencies Bid


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That's it for the press conference. A few takeaways:

  • On policy: "We have not reached substantial further progress yet" for tapering. On rate hikes, "not something that's on our radar screen right now...we are not at all at now or near now".
  • Powell/ the FOMC does not appear to be particularly concerned by the Delta variant - notably Powell said that "there has tended to be less in the a way of economic implications from each wave". Though of course he noted some risks, but sounded very much like he thought the US economy would just get on with it.
  • Asked about bond market moves since the June meeting: said there was no "real consensus" on what explains them (noted Delta / growth concerns and inflation breakevens slipping), but didn't seem particularly concerned.
  • Reiterated previous thinking on transitory inflation and labor market dynamics. For inflation, it's really about whether expectations move higher for the Fed to take notice.
  • He said the FOMC discussed time and pace and composition of the taper (in a "deep dive"). So the minutes in three weeks' time will be a must-read. But Powell wouldn't be drawn into the timing.
  • The MBS taper before/faster than Tsy taper idea appears to be a non-starter. Powell noted that raising rates before finishing the taper "wouldn't be ideal, I'll say that."
  • No concern over ON reverse repo takeup size.
  • All in all, nothing to derail the prevailing expectation that the Fed will initiate a taper in December/January.