WSJ Fedwatcher Nick Timiraos is out with his latest.

Notable points:

  1. Powell scrapped his original Jackson Hole text, changing it to be shorter and more blunt, according to two sources
  2. Fed officials, while reluctant to say it bluntly, could raise rates until they force unemployment higher and slow wage growth
  3. Notes that Powell stopped talking about a soft landing, unless asked
  4. Inside the Fed, one camp has argued for moving faster to around 4% (notes Bullard public remarks)
  5. Fed officials are anxious not to let an inflationary mindset take root

Read it here.

It doesn't read like a leak so it might be ignored by the market but if it is, it underscores that the Fed is ready to make tradeoffs to get inflation under control. That would mean higher unemployment and weaker growth, if not a recession.

As important as what's in the article is what's not. If the Fed was going to raise 100 bps, they'd leak it. There's no talk of 100 bps here so it's probably now safe to take it off the table (current pricing is 17%). Given that, we're seeing a bit more buying in equities ans some USD softening.