Powell still 'navigating by the stars under cloudy skies' but long rates still going their own way

Jay Powell is putting to bed any chance of a November 1^st rate hike but the fed funds futures market was certainly pricing that in anyway. The odds of a move higher in December is just 24% vs 28% right before he spoke. As to not let markets get carried away though, he left the door open for more rate hikes if there is “evidence of persistently above trend growth, or that tightness in the labor market is no longer easing” which could reaccelerate inflation.

The word ‘carefully’ was used by him again so they can further digest all the incoming data and in light of the ‘significant’ tightening of financial conditions he cited, acknowledging the sharp rise in long term interest rates as they “remain attentive to these developments because persistent changes in financial conditions can have implications for the path of monetary policy.”