Tomorrow morning brings a much anticipated appearance from Fed Chair Powell at the annual Jackson Hole Symposium.  As is often the case leading up to this event, there's a lot of speculation as to its potential importance and ample criticism of that speculation.  

Jackson Hole speeches are indeed highly variable in terms of their impact on interest rates.  For the most part, the market has learned that, at the very least, it stands a chance to create meaningful volatility.  In this sense, it's like any other scheduled speech from Fed Chair Powell.  

One reason that there's a bit more of a buzz than normal this time around is that the Fed has just recently acknowledged that it's not thinking about upcoming rate hikes in the most aggressive possible terms, but rather, open to taking a more data-dependent approach.  This doesn't mean the Fed won't hike rates in September--more like they haven't already decided to hike as much as they possibly can.

What might change their mind?  Nothing between now and tomorrow morning!  The Fed needs to see almost an entire month of additional economic data between now and the September 21st Fed announcement before firmly deciding on the next policy move.  The highest probability cases can be made for a hike of either 0.50% or 0.75%.  Powell may discuss these options tomorrow, but markets are more interested in getting a sense of what's important to Powell, both in terms of specific data and general timelines.

Ultimately, Powell will be forced to fall back on some iteration of "it depends on the data."  As a result, market participants may well find themselves in a position to read between the lines, or simply take "it depends" for an answer.

Despite the high likelihood of something less than specific and clairvoyant from Powell, the market has been trading as if the Fed Chair would promise an unfriendly approach to rates in the September announcement.  Granted, this isn't the only market mover in play recently, but it's certainly one of the main themes.  As a result, the past few weeks--and especially the past 4 trading days--have resulted in rapidly rising rates.  Today was finally the day where traders decided they'd pushed rates high enough to adequately price-in their defensive pre-Powell fears.

The average mortgage lender began the day very close to yesterday's latest levels, but slightly lower.  As the day progressed, bonds improved to the point that almost every lender was able to offer a mid-day price improvement.  This isn't necessarily a game changer, but it could mean slightly lower upfront costs for the same rate quoted yesterday.