Last week’s “hawkish hold” has sparked a lot of turmoil in trading over the last week, sending treasury yields and the US Dollar upward while dragging on equities and commodities. Today, investors may get a sense of whether the market reaction to last week’s Fed announcements has had any impact on thinking at the US central bank.
Four FOMC members are speaking today, headlined by Chair Powell after market close. Fed speakers have the opportunity to double down or walk back some of last week’s neutral to hawkish tone. Further hawkishness may keep upward pressure on treasury yields. A dovish shift may give bulls some short-term relief but also could raise questions about the health of the economy heading toward earnings season.
Ahead of today’s speeches, traders appear to be sitting on their hands. The 10-year US treasury note yield is holding steady just above 4.60%. US index futures are essentially flat, Europe is mixed with the Dax up 0.2% and the FTSE down 0.2%. In commodity action, WTI and Brent Crude Oil are both down 0.4%, while Natural Gas is up 1.3% and Copper is up 1.1%.
Today’s US economic reports, which include the latest update to US Q2 GDP (2.1% unchanged) and weekly initial US jobless claims (204K v street 215K) were in line or better than expected, particularly the price component of the US GDP report (1.7% vs street 2.0%) which indicates inflation pressures eased in the spring.