Adam had the news here earlier, that Federal Reserve board member Lael Brainard will speak on Monday

  • Monday, September 12
  • Due at 1 pm ET (that's 1700GMT)
  • Speaking at the Chicago Council on Global Affairs
  • The topic will be "the economic outlook for the United States and monetary policy implications"
  • It'll be in the form of a conversation with Michael Moskow (past head of the Chicago branch of the Federal Reserve)

Says Peter Hooper, chief economist at Deutsche Bank Securities:

  • It could be a coincidence
  • But it could also be an important opportunity for the Fed to raise market expectations and give the FOMC more room to maneuver at the September meeting
  • After San Francisco Fed President John Williams failed to budge the market with a fairly hawkish speech Monday evening, we assumed it would likely take an interview with Yellen to turn market expectations about the September meeting around, should they seriously be considering a rate hike
  • Certainly a good case can be made for moving "soon" (in September) given: (1) payroll growth in recent months now averaging in excess of where the Fed wants to see it, (2) generally improving signs for consumer spending and overall GDP growth (the latest ISM notwithstanding), and (3) relatively favorable financial conditions
  • I had moved my odds on a September hike to the mid-40s in the wake of recent Fedspeak, but not higher because there is still some room for improvement in the inflation picture. But this development re. Brainard has to place the probability very close to 50%.

OK, so, in a nutshell, market thoughts are that this announcement, a surprise speaking engagement, is an opportunity for a confirmed dove like Brainard to express some comfort for the idea of a rate hike this year... and thus (to repeat DB): it could also be an important opportunity for the Fed to raise market expectations and give the FOMC more room to maneuver at the September meeting

Adding to the feverish speculation that she'll speak in favour of a hike is that the speech occurs on the final day members of the FOMC can comment publicly ahead of the pre-meeting (September meeting) blackout period.

Maybe, maybe not .... but what a cool story :-D