Deutsche Bank said the coming week will bring a dense run of Federal Reserve appearances ahead of the pre-meeting blackout period, after several relatively quiet weeks for Fed commentary. Governor Christopher Waller is set to open the slate with a Monday speech at the New York Association for Business Economics. Fed Chair Warsh is scheduled to testify on Tuesday and Wednesday, while additional outlook remarks are due after the release of June CPI data from Lisa Cook on Wednesday, and from Vice Chair Jefferson, Dallas Fed President Logan, and Kansas City Fed President Schmid on Friday.
The bank said markets will be paying closest attention to how officials interpret this week’s inflation data and whether any of them show a preference for a July rate increase. Deutsche Bank expects Warsh to reiterate his recent stance while staying quiet on future policy moves. Waller, by contrast, is seen as more likely to spell out his policy reaction function and expectations in greater detail, making his remarks especially important for reading policy leanings.
Deutsche Bank also pointed to the June meeting minutes, which said “several” officials believed there had been a case for a rate hike last month. Since then, the picture has been mixed: oil prices and inflation expectations eased before partly rebounding, while the unemployment rate moved lower. That leaves open the possibility of dissenting votes in favor of a hike at the July meeting.
Fed officials face a packed speaking calendar next week
Deutsche Bank said on July 11 that, after several weeks of relatively light commentary from Federal Reserve officials, next week will bring a wave of appearances ahead of the blackout period.
Christopher Waller is set to lead off on Monday with a speech at the New York Association for Business Economics. Fed Chair Warsh will testify on Tuesday and Wednesday. After the release of June CPI data, several officials are also due to give outlook remarks: Lisa Cook on Wednesday, then Vice Chair Jefferson, Dallas Fed President Logan, and Kansas City Fed President Schmid on Friday.
Markets are watching how officials read the inflation data
Deutsche Bank expects Warsh to repeat his recent stance while staying silent on future policy action. Waller is viewed differently. The bank said he is usually more willing to explain his policy reaction function and expectations in detail, so his remarks will be watched closely for signs of where he stands.
For the outlook speeches, the main question for markets is how officials interpret this week’s inflation figures and whether any of them appear inclined toward a July rate hike.
What changed after the June minutes
Deutsche Bank noted that the June meeting minutes showed that “several” officials believed there had been a case for a rate increase last month. Since then, the picture has been mixed: oil prices and inflation expectations moved lower, then partly rebounded, while the unemployment rate declined further. That means the July meeting could still produce dissenting votes in favor of a hike.
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