$BTR $ENA $DOGE Once again, we’re at the Jackson Hole annual conference—but this year, there probably won’t be much fireworks. Fed Chair Powell’s speech on Friday will most likely be the same old routine: not spelling out a rate-path, nor releasing any clear signals. Traders in the bond market who are hoping he provides direction are likely to be disappointed again. The real time to watch is next week—Governor Waller has a scheduled appearance on September 3. By then, the quiet period ahead of the September 15–16 FOMC meeting will be down to just two days, and the weight is not small.
Since taking office, Powell has remained notably tight-lipped, leaving policy interpretation largely to the market and the data, with very little proactive guidance on expectations. This style has put the bond market in a tough spot. At present, 30-year U.S. Treasury yields are nearing their highest levels in two decades. The long end is especially vulnerable to policy uncertainty. SOFR futures pricing shows that the probability of a rate hike in September is still above 30%. Short-end expectations are relatively stable, meaning the pressure is accumulating mostly at the long end.
Waller is different—he’s better at turning ambiguous positions into tradable signals. Before the release of July core CPI, he explicitly said that if inflation runs hotter again, the Fed should consider a near-term rate hike. But things changed afterward: core CPI in June and July continued to cool, and the PCE data released this Wednesday was also fairly moderate, so rate-hike expectations have eased.
So, if Treasuries sell off after Powell’s speech, it would be more a case of the market adapting to this new framework of “no forward guidance,” rather than any wavering in the Fed’s credibility on combating inflation. For traders, the signals with real trading value will likely have to wait until Waller speaks next week. #比特币升破8万美元创三月新高 #比特币守于7.94万美元
Since taking office, Powell has remained notably tight-lipped, leaving policy interpretation largely to the market and the data, with very little proactive guidance on expectations. This style has put the bond market in a tough spot. At present, 30-year U.S. Treasury yields are nearing their highest levels in two decades. The long end is especially vulnerable to policy uncertainty. SOFR futures pricing shows that the probability of a rate hike in September is still above 30%. Short-end expectations are relatively stable, meaning the pressure is accumulating mostly at the long end.
Waller is different—he’s better at turning ambiguous positions into tradable signals. Before the release of July core CPI, he explicitly said that if inflation runs hotter again, the Fed should consider a near-term rate hike. But things changed afterward: core CPI in June and July continued to cool, and the PCE data released this Wednesday was also fairly moderate, so rate-hike expectations have eased.
So, if Treasuries sell off after Powell’s speech, it would be more a case of the market adapting to this new framework of “no forward guidance,” rather than any wavering in the Fed’s credibility on combating inflation. For traders, the signals with real trading value will likely have to wait until Waller speaks next week. #比特币升破8万美元创三月新高 #比特币守于7.94万美元