00:00What are the questions that you think this Fed share needs to answer? Are we today?
00:03I think that the best thing that he can do is to give some type of reaction function here.
00:10Obviously, the likelihood of giving actual forward guidance going forward seems unlikely at this
00:17point. But giving some type of reaction function would be very helpful to markets. I think that
00:23it would be taken well. But in terms of Jackson Hole, we do think that there is somewhat of an
00:28asymmetric risk. It's most likely going to be disappointing to markets if he doesn't come
00:35out with enough information here. Whereas there's not that much to gain in terms of if he does give
00:40us some clarity on a reaction function, just because we don't think he's going to give us
00:44quite enough there. If it's limited in communication, is that a reason to sound the long end?
00:49That was the story in the news conference a few Wednesdays ago. Is that the story for next Friday?
00:54I think that there will be some concerns around the long end. But the recent backup in the
00:58long end over the last month or two was actually driven more on term premium and growth expectations
01:05rather than the inflation credibility that had been driving it post-June FOMC. So I think that
01:12some of the backup is not actually due to the Fed here. It's actually due to external factors such as
01:19AI issuance. But monetary policy uncertainty certainly feeds into higher term premiums. So it's certainly
01:25not helping. But I don't think the entire story here is the Fed for the long end.
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