Fedspeak

Employment turned negative while prices paid, and prices received both higher month on month.

In FedSpeak, Barkin noted, passing shocks related to tariffs and energy are not fading.

Added economic conditions are firming.

Williams and Jefferson also spoke, though with little read through on monetary policy outlook.

And we've taken out the rate cut that we had in 2027.

So we'll be looking for FedSpeak next week to sort of reinforce the hawkish speaker at the meeting and reinforce our conviction around our call that now sees much more tightening than we had just a couple of months ago.

Similarly, we'll hear from Bank of England speakers following that central bank meeting last week.

I'll be watching most closely Sarah Breeden and Claire Lombardelli, probably particularly Lombardelli, because I think we can really consider her as one of the key swing voters and perhaps the most hawkish of the sort of dovish majority, if you like.

Yeah, I think we're on watch today to see whether or not every state, all 50 states, will have diesel averages above six.

Eric, it's going to get interesting next week with FedSpeak as well.

Appreciate the time as always.

Thanks, guys.

Hey, Leslie.

Yeah, an analysis by Deutsche Bank of FedSpeak, it uses a large language model.

It finds the 12 voting members of the Federal Mark Committee are the most hawkish they have been in the five years they've been doing this study.

On a scale of one to 10, with 10 being the most hawkish or inclined to hike, the analysis of Fed communication gauges the 2026 voters as the most hawkish since 2021, a 7.2 score, uh, on a scale of one to 10.

Now, the probabilities of futures prices show a 93% probability of a rate hike this week, 80% for a second hike in December, and even 68% for a third hike in March 20- 27.

These probabilities are volatile.

They change quickly with data or FedSpeak, but they reflect where the market is thinking, what the market is thinking right now.

The 10-year near 5%, along with the two-year more than 100 base points over Fed funds, it's a signal to the Fed that the market thinks rates should be higher.

Two things jumped off the pages of his speech.

First, FedSpeak may be making a comeback.

Former Fed Chairman Alan Greenspan became famous for phases like irrational exuberance.

One section of Warsh's speech, titled Preparing for Future Policy Conjunctures, felt like a throwback.

Final Q2 productivity and costs held at a 1.4% seasonally adjusted annual rate while unit labor costs improved to 1.2% from a previous revision to 1.3%.

In FedSpeak, Waller said if the disinflationary trend holds, he is inclined to hold rates at September's FOMC meeting.

Friday brings the August employment report.

The street is looking for a 55,000 increase in August non-farm payrolls following a 23,000 decline in July.