Treasury auction and a Q&A session with Jay Powell at the Economic Club of New York, just before the Federal Reserve’s blackout period begins on October 19th.in November is quite low, at less than 10%, while the odds for a December rate hike are less than 40%. Given these numbers, making a public statement heading into the November Fed meeting might seem unnecessary, which makes this week’s appearance a bit odd.
At this juncture, the Federal Reserve would prefer to let the market take the lead. They recognize that the economy remains robust, making bringing inflation back to its target level challenging. Therefore, it would seem the Fed is looking to the longer end of the yield curve to help achieve its goals. This is because the Fed’s capacity to influence financial conditions by raising rates at the short end of the curve is limited compared to the impact of changes in rates at the longer end.