FED: Powell To Lead Fedspeak In First Address Since Sept FOMC Presser

Today sees a return of heavier Fedspeak, all with voting roles this year (three permanent and two on rotation). The most focus will clearly be on Fed Chair Powell’s update at 1220ET in the last week before the media blackout begins this weekend ahead of the Oct 28-29 FOMC meeting. 

• These will be Powell’s first notable remarks since the Sep 17 FOMC press conference (MNI Review, here), where a lack of clarity on delivering future cuts shown in the accompanying SEP prompted a hawkish reversal of an initially dovish reaction to the rate decision and SEP.
• Powell best summed up the decision to cut rates last month as “a risk management cut”. He said that the Committee’s diverse opinions on the rate path ahead – as encapsulated by a wide dispersion in the Dot Plot and a continued split on year-end 2025 rates – reflected difficult choices that would have to be addressed on a “meeting-by-meeting” basis: “it's not a bad economy or anything like that. We've seen much more challenging economic times but from a policy standpoint… it's challenging to know what to do…there are no risk-free paths now. It's not incredibly obvious what to do, so we have to keep our eye on inflation. At the same time, we cannot ignore and must keep our eye on maximum employment.”
• Powell said that while a move “toward the direction of neutral” was warranted, when asked, he wouldn’t commit to saying that an exit from restrictive policy was warranted. He said that “Over the course of this year, we’ve kept our policy at a restrictive level, and people have different views, but a clearly restrictive level, I would say so… [earlier in the year] the risks which were clearly tilted toward inflation, I would say they’re moving toward equality. Maybe they’re not quite at equality. We don’t need to know that. But we do know that they’ve moved meaningfully toward greater equality - the risks between the two goals. And that suggests that we should be moving in the direction of neutral. And that’s what we did today.”
• We’ll watch his comments on labor market risks. Last month’s remarks somewhat echoed last year’s August “pivot” ahead of easing, saying “we see that the labor market is softening and we don’t need it to soften anymore, don’t want it to.” But it was much less emphatic than in August 2024 when he presaged a 50bp cut the following month with: “We do not seek or welcome further cooling in labor market conditions…We will do everything we can to support a strong labor market as we make further progress toward price stability."
• The FOMC minutes from the meeting made it clear that members are looking at broad measures of labor market balance even more closely than would otherwise be the case. Markets will no doubt be attuned to Powell’s latest take here, likely influenced by liaison survey evidence (the Beige Book is publicly released tomorrow) and other private indicators amidst a lack of government data. The ADP employment report was of course notably weak at -32k in Sept after -3k in Aug. 

Today’s schedule: 

• 0845ET – VC Supervision Bowman (voter, dove) in moderated discussion at IIF (no text)
• 1220ET – Chair Powell (voter) on economic outlook and mon pol at NABE (text + Q&A)
• 1525ET – Gov. Waller (voter, dove) on payments panel at IIF (no text)
• 1530ET – Boston Fed’s Collins (’25) at Greater Boston Chamber of Commerce (text + Q&A)
• Time unknown - Chicago Fed's Goolsbee ('25) in morning podcast appearance "You Might Be Right"