Christopher Waller

One interpretation of the dovish market reaction to CPI in the rates market today is that Fed speakers weren't as hawkish as you would expect after a hot CPI reading. I continue to believe that the reaction function has changed and the Fed and markets do a delicate dance. As I've written before:

Markets expect Fed officials to know exactly what's priced in via the Fed funds futures market. Instead of watching what Fed officials say, it's all about what they don't say

When they don't push back hard, it means that they're at least open to the path that's priced in. Today we heard from Barkin, Goolsbee and Mester -- none of them offer any pushback. If anything, they were dismissive of CPI.

That's ramped up speculation that the Fed will continue to lay the groundwork for cuts.

"We’ve already heard chatter that Waller’s comments on Tuesday will represent an important contribution to the discourse on the forward path of policy," writes BMO today.

Barkin speaks again tomorrow and Monday is a US holiday but on Tuesday the calendar picks up again, starting with Waller.

"Has the war on inflation really been won? How will the Fed decide when it’s time to cut interest rates? Next Tuesday, hear from Federal Reserve Governor Christopher Waller on these and other questions on the economy and monetary policy," Brookings writes ahead of the event.

Tuesday also features the Beige Book and more comments from Williams, who spoke earlier this week.

From there, the lone speaker remaining is Bostic on Thursday. I expect someone else could pop up but on Friday at midnight, the Fed blackout period starts and runs through Feb 1.

Jerome Powell FOMC blackout tape on mouth