With the disapponting payrolls report now in the rearview mirror, which despite missing consensus expectations and a miserable private payrolls print, was not bad enough to ensure a 50bps rate cut on September 18, all eyes now turn to Jerome Powell’s speech on the economic outlook at an event in Zurich hosted by the Swiss Institute of International Studies, at 12:30pm ET.
As Deutsche Bank reminds us, the Fed’s media blackout period kicks in at the weekend so it’s a last opportunity for the Fed and Powell to get a message across, if they want to. Consensus expects Powell’s comments to largely mirror his Jackson Hole speech which was broadly dovish in acknowledging the argument for future policy accommodation but not pre-committing to any specific policy actions.
Commenting on Powell’s speech, Kristina Hooper, chief global market strategist at Invesco, told Bloomberg TV: “I suspect what we will hear from Powell is a very tepid commentary on the Fed’s ability to provide monetary policy accommodation.”
Heading into the speech, stocks are back to session highs, the Dow up some 100 points even as 10Y yields are at session lows, while the market is pricing in 12.6% odds of a 50bps rate cut with a 25bps rate cut guaranteed.
Watch Powell speak live below (direct link to the event hosted by the SNB):