BlockBeats news, on August 29, StoneX market analyst Fawad Razaqzada said that Wash’s speech on Friday evening was considered fairly hawkish. Wash said what the market expected him to say regarding forward guidance—that he does not believe in forward guidance—and therefore declined to commit in advance to a September rate hike. However, this did not prevent the market from speculating that a rate hike might indeed be back on the table.
Regarding inflation, Wash stated that combating inflation remains a clear priority, elaborating on this point in detail, though he also added that he is confident core inflation is moving toward the Fed’s target. Overall, his remarks were more hawkish than market expectations. During Wash’s Jackson Hole speech, markets significantly repriced the likelihood of the Fed’s September decision, with the probability of a 25-basis-point rate hike rising from 30% to approximately 50%.
Before the September Fed meeting, there will be an NFP jobs report and a CPI inflation report, along with some minor data releases. Under its new chair, the Fed has become more data-dependent. Given that recent U.S. employment reports have consistently missed expectations by a significant margin, any further signs of weakness could severely undermine market expectations for a September rate hike.