Market 'Starved' for Data: Vanguard's Quigley

Watch Market 'Starved' for Data: Vanguard's Quigley - Bloomberg on Dailymotion

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00:00Between today and the FOMC, we have 17 trading days and there's a lot of data that has to come

00:06out that may or may not come out during that time. But the wildcard is really the timing of

00:10these data prints. We're going to see a cluster of volatility that normally takes place over a

00:15couple of months and instead is going to be compressed. Brian, let me start with you. Will

00:19the data dump be disruptive or more of a shrug of the shoulders? Because we did get alternative

00:23sources of data. Well, like you said, the market's been starved for data over the past month and a

00:28half. And the market's really eagerly awaiting these releases that we're expecting to start

00:32next week and hoping for clarity on the current situation in the economy. Unfortunately, I'm not

00:38sure we're going to get that clarity. As you mentioned, the data is going to be coming out on

00:44a lag, on a delay. We're talking about September payrolls hitting next week. So that's two months

00:49old now. And then there's going to be questions around consistency and accuracy of the data.

00:54And so we think it's going to, the picture is going to remain quite cloudy for the next several

00:59months. So Kelsey, what assumptions are you making in the absence of official data and how are you

01:04preparing for this flood? Yeah, so it's interesting because yes, we don't have official data, but we

01:10actually feel like there's a fair bit of data to review and to pour over and that we have been on,

01:17particularly on the labor market, even with the government shut down. And what we're seeing in terms of

01:23the labor market is it actually still remains very squishy. And that's why our base case is that the

01:28Fed ultimately does follow through with a rate cut of 25 basis points. Now, I think the market is

01:34reasonable in terms of pricing in a 50-50 odds. And I think part of that is because of the noise within

01:42the committee. I mean, but this really isn't new news. Think back to the September FOMC and you look at

01:49that division. There were nine people on the committee that thought that the Fed funds rate

01:54should be at the current level or higher and 10 that thought it was should be lower. Right. So that's

02:01a bit of a split. But I think it's missing a bit of the force for the trees, which is you look out

02:06further in 2026, 17 out of the 19 members think that the Fed funds rate is going to be lower than it is

02:12today by the end of next year. And so that's really, I think, the more important signal for the fixed income market

02:19more more broadly.