Following a slew of FedSpeak from his minions (all confirming the ‘high(er)-for-long(er), data-dependent, no rate-cuts in sight’ narrative), and after his nothingburger address at The Fed yesterday, Fed Chair Powell will participate in a panel discussion at The IMF entitled: “Monetary Policy Challenges in a Global Economy.”
Joining Powell in the discussion are the IMF’s Gita Gopinath, Bank of Israel Governor Amir Yaron, and Kenneth Rogoff, chair of international economics at Harvard University.
We would imagine it will be hard for him to navigate that Q&A without some market-moving comment on where we are in the monetary-policy cycle (especially given the dramatic loosening of financial conditions in the last week)…
During his press conference last week, Powell did everything possible to maintain policy optionality, but most Fed watchers and market participants believe the Fed’s tightening cycle is complete (90.5% odds that Fed stays on hold in Dec).
EY Chief Economist Gregory Daco.
“We continue to believe the Fed’s policy playbook needs a revision, especially in an erratic economic, financial, and geopolitical climate,” he wrote in a note Wednesday.
“Navigating on a meeting-by-meeting basis without a compass and only yesterday’s news at hand is perilous. It’s imperative for policymakers to recalibrate and make their policy framework more prospective.”
While next week brings the economic data deluge back (most notably CPI), there’s still a chance that Powell can gently jawbone back the dramatic ‘easing’ that the market has created in the days since the last press conference… and will anyone ask him about the collapse of liquidity in the US Treasury market…
Watch Live (due to start at 1400ET):