Philip Jefferson

But what we saw ahead of the CPI number was FedSpeak moving aggressively to push back against October probability when it was more priced in the market.

So, a number of core officials, like Vice Chair Jefferson, New York head President Williams, and Governor Waller, all came out and pretty explicitly tried to push back on October.

On top of that, you've also gotten a bit of market stress recently.

In addition to the selloff in Treasury yields, there's been some cracks in credit markets, particularly concerns about AI, and then potentially some spillovers from Europe as well.

I think it's overconfident in that we don't have evidence yet that sort of the other members of the Fed speak for Warsh the way that they did for Powell.

So I think there's still uncertainty about whether a speech from John Williams at the New York Fed or Philip Jefferson, who's a governor, vice chair, is really carrying water for Warsh, or are they just sort of speaking on their own behalf? Warsh, we know his history as being quite hawkish, kind of in good times and bad.

And it's possible that he looks at the market data and says, markets are priced for two to four rate hikes between now and the middle of next year.

Why not just get going on it? And arguably, that's what happened in September, where some members were trying to say, we're going to wait another meeting, and then they hiked.

Mm.

And even quiet-spoken, not a media hound, Philip Jefferson, who is the other vice chair, mind you, he's the vice chair of the Federal Reserve Board, and it was when he made comments subsequent to Williams that the bond market went to funk.

Yeah.

20%... 80% probability to 20%-

And it's followed up by...

Vice Chairman Philip Jefferson, and he said that maybe we don't need to raise rates in October, and the probabilities fell.

When did Philip Jefferson ever move markets before two weeks ago? No one even knew the guy was the Fed vice chairman.

But the fact is, because Warsh isn't giving forward guidance, we're now going down the stack and saying maybe it's Jefferson, maybe it's Williams, maybe it's Waller.

And so we're at a big level of confusion.

Vice Chair Bowman said the same thing.

Vice Chair Jefferson said the same thing.

You know, it's funny, for a, a, a Fed that Chair Mersch doesn't want to give forward guidance, they've given us a lot of forward guidance, a- and most of it seems to point toward December rather than October.

That's still our base case.

Warsh doesn't message.

He doesn't wanna give forward guidance.

So in that vacuum, we look to people like Williams or Philip Jefferson, the vice chairman, and we assume that they're the new spokesman.

When did Philip Jefferson ever move markets before two weeks ago?

There is no need for urgency, New York Fed President John Williams said last month.

Fed Vice Chair Philip Jefferson echoed that sentiment.

Any future adjustment in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance risks, he said earlier this month.

But waiting to act carries risks of its own.

And you can see that sudden shift reflected in the rhetoric from key federal reserve voters.

We have heard from Philip Jefferson, John Williams, Christopher Waller and Michelle Bowman recently.

And they have all alluded to the necessity of a pause.

They want to take time to assess how the previous rate hikes are actually transmitting through the broader economy before they aggressively hike again.

...

the Vice Chairman, uh, Philip Jefferson, and the, uh, the Vice Chairman of the Open Market Committee, the New York Fed President John Williams, who said, "Yes, we need to raise rates again, but we don't necessarily have to do it this month." So the market is operating from the point of view that, uh, unless we get a really big surprise in CPI, uh, just a normal rise won't do it because they can figure they'll raise rates again in December.

Okay.

Well, what's a normal rise mean, [laughs] Mike?