It Doesn't Matter if Powell's Speech Matters

Some things will be yearned for, anticipated, and sought after regardless of how likely or attainable they are.  Applying this general truth to Friday's Jackson Hole speech from Fed Chair Powell, we can rest assured that there's no possible way for Powell to give the market what it truly desires: clarity on the Fed's policy path in the coming weeks and months.  All Powell can do is remind the market that such clarity will only gradually come into focus with the benefit of additional economic data.  With that in mind, the best Powell can do would be to help the market understand the Fed's baseline mentality as of today and their probable reactions to various eventualities in the coming weeks.  For any volatility that follows, it is not Powell's speech that will ultimately set the tone as much as the data and events that Powell says he's watching.

Econ Data / Events
    • Jobless Claims
      • 243k vs 253k f'cast, 250k f'cast
    • GDP Prelim
      • -0.6 vs -0.8 f'cast, -0.9 prev
Market Movement Recap
09:10 AM

Sideways to slightly stronger in the first half of the overnight session, then drifting back toward unchanged after 6am.  Modestly weaker after 8:30am econ data.

11:51 AM

Decent gains after initial shakiness.  10yr now down 4bps at 3.07.  MBS up 3 ticks (.09) at 99-26 (99.81).

01:32 PM

Strong 7yr Treasury auction reinforces the ceiling in rates ahead of tomorrow's J-hole speech.  10yr now down 7bps at 3.04 and MBS up just over a quarter point. 

03:22 PM

Additional gains into the 3pm hour, but leveling off now.  10yr down 8+bps at 3.03% and MBS up 3/8ths of a point.  Multiple positive reprices. 

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