Since the July FOMC meeting, US macro data has done nothing but surprise to the upside, but that didn’t stop The Fed from slashing rates by a crisis-like 50bps on 9/18.

Source: Bloomberg

The strengthening economic data, ‘soft’ or ‘no’-landing-esque, has prompted a hawkish decline in the market’s expectations for rate-cuts in 2024 and 2025…

Source: Bloomberg

In light of all that, Fed Chair Powell is scheduled to address the National Association for Business Economics (NABE) at 1355ET in Nashville, Tennessee, and for the first time since the big cut, he is expected to elaborate on the Fed’s decision and on the considerations that will frame an expected series of reductions in borrowing costs over the rest of this year and in 2025.

Debate over that decision has already begun.

In remarks to a bank conference in South Carolina on Monday, Fed Governor Michelle Bowman, who dissented against the half-percentage-point cut on Sept. 18 in favor of a quarter-percentage-point reduction, noted that the personal consumption expenditures price index stripped of food and energy costs had increased slightly in August.

Interestingly, Reuters reports that among 32 professional forecasters surveyed recently by the NABE, 39% cited a “monetary policy mistake” as the “greatest downside risk to the U.S. economy over the next 12 months.” By contrast, 23% regarded the outcome of the Nov. 5 U.S. presidential election as the biggest downside risk and the same number cited an intensification of the conflicts in Ukraine and the Middle East.

So will the apolitical Powell jawbone the market’s uber-dovishness back a smidge? Or play down just how strong recent macro data has been?

Watch Powell speak live here (due to start at 1355ET):

Read Powell’s full prepared remarks below:

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