Powell's first six speeches review. Everyone is looking forward to his speech at 22:00 tonight, and be prepared to respond! ! !
August 24, 2018, after the speech, the 2-year US Treasury yield was -1Bp. Advocated gradual rate hikes as a compromise, and the market interpreted "gradually" as once a quarter; expressed doubts about the forecast values of r* (neutral interest rate) and u* (neutral unemployment rate); pointed out that overheating risks include financial overexpansion, not just high inflation.
August 23, 2019, after the speech, the 2-year US Treasury yield was -4Bp. Advocated further rate cuts to address a series of downside risks, and hinted that the market has already priced in rate cuts to keep financial conditions loose. Goldman Sachs then raised its expectations for further rate cuts.
August 27, 2020, after the speech, the 2-year US Treasury yield was +0.4Bp. Announced the adoption of a flexible average inflation target, concluding the assessment of the monetary policy framework. This is a significant long-term easing shift, but it is largely in line with expectations. Goldman Sachs brought forward its expected timing of changes to forward guidance and asset purchase programs by one meeting.
August 27, 2021, 2-year Treasury yields -2Bp after the speech. While acknowledging the strength of recent employment data, it also pointed out the downside risks posed by the new crown Delta variant; reinforced expectations of an imminent announcement of tapering.
August 26, 2022, 2-year Treasury yields +4Bp after the speech. Reiterated that it is appropriate to slow the pace of rate hikes at some point, but also said that policy may need to remain tight for "quite a while" to control inflation, and said that an additional 75 basis points "may be appropriate", but will depend on the data.
August 25, 2023, 2-year Treasury yields +4Bp after the speech. Said that the Fed will "act cautiously" when deciding whether to raise interest rates at future meetings, which indicates that there will be no further rate hikes at the next meeting or in this cycle; made a more hawkish risk assessment and pointed out that the Fed noticed that "the economy may not be cooling as expected"
