zerohedge.com / by Kevin Muir via The Macro Tourist blog / Aug 25, 2017 8:02 AM
Today is the day. Both Draghi and Yellen speak later at Jackson Hole. Although expectations for market moving news have been damped down, the market might be getting a little too complacent.
Over the past month or so, bond markets have been drifting higher on the assumption the Fed would take a dovish wait-and-see approach to the introduction of quantitative tightening (widely expected to be started in September.) On the other side of the Atlantic, investors are increasingly pricing in a slower tapering to the ECB’s quantitative easing program, believing Draghi would rather overshoot than risk pulling a Trichet by tightening and then be forced to quickly resume easing.
Have a look at the movement over the past three months of the Fed Funds futures’ curve:
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