Deutsche Bank said Federal Reserve officials are set for a packed run of public remarks next week, ending a relatively quiet stretch ahead of the pre-meeting blackout period. The schedule starts with Governor Christopher Waller, who is due to speak Monday at the Money Marketeers of New York University, followed by Chair nominee-style testimony from Warsh on Tuesday and Wednesday. After the release of June CPI data, several officials are also scheduled to offer updated views, including Cook on Wednesday and Vice Chair Jefferson, Dallas Fed President Lorie Logan, and Kansas City Fed President Jeff Schmid on Friday.
According to Deutsche Bank, markets are likely to focus less on routine appearances and more on how policymakers interpret the latest inflation figures. The bank expects Warsh to reiterate his recent remarks while staying quiet on near-term policy moves. Waller, by contrast, is seen as more likely to spell out his reaction function and policy expectations, making his appearance a key event for traders looking for signals.
The note also points back to the June meeting minutes, which said “several” officials believed there was a case for a rate increase last month. Since then, oil prices and inflation expectations have fallen and then partly rebounded, while the unemployment rate has moved lower, leaving open the possibility of dissenting votes in favor of a July rate hike.
Fed officials are set for a busy speaking week
Deutsche Bank said on July 11 that, after several weeks of relatively light commentary from Federal Reserve officials, next week will bring a concentrated wave of speeches ahead of the blackout period.
The lineup begins with Waller, who is scheduled to speak Monday at the Money Marketeers of New York University. Warsh is set to testify on Tuesday and Wednesday. After the June CPI release, several officials will also deliver outlook remarks, including Cook on Wednesday, followed by Vice Chair Jefferson, Dallas Fed President Lorie Logan, and Kansas City Fed President Jeff Schmid on Friday.
Markets are watching how officials read the CPI data
Deutsche Bank expects Warsh to restate his recent position while remaining silent on future policy action. Waller is usually more willing to lay out his policy reaction function and expectations in detail. That is why his speech is likely to draw closer scrutiny for any signal about his policy leanings.
For the outlook speeches, the main market focus is how officials interpret this week’s inflation data and whether any of them still lean toward a July rate increase.
June minutes showed some support for a hike
As the June meeting minutes stated, “several” officials believed there was reason to raise rates last month. Deutsche Bank said the picture since then has been mixed: oil prices and inflation expectations declined and then partly rebounded, while the unemployment rate moved lower. Against that backdrop, dissenting votes in favor of a rate hike at the July meeting cannot be ruled out.
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