There's a big Fed speech coming up on Monday - here's why traders are paying attention
After a pre-FOMC meeting blackout period ends, we often get a rush of "Fed Speak," but the market is particularly interested in what Fischer has to say on Monday due to his previous academic relationships with some Fed members and his previous experience leading the Bank of Israel.
In a note before the market open on Monday, UBS' Art Cashin explained why the market is on alert.
Cashin wrote:
There will be lots of Fedspeak this week but the key point may be the noon appearance of Fed Vice Chair Stanley Fischer at the Economic Club of New York. Fischer is slightly elevated among Fed members, having taught Bernanke and others in graduate school. His former chairmanship of the central bank of Israel also sets him apart.
Traders will watch to see if he repeats certain themes he has expressed before. He thinks the Fed should be a bit less transparent, feeling that specific targets and mileposts can be misleading (e.g. the unemployment target). He also seems to feel that the Fed must raise rates this year. He is also the only Fed official to concede that any rate hike will be different than any seen before. This time the Fed will hike rates by raising the interest it pays on excess free reserves. A typically candid Fischer could move markets.
Business Insider will be in the house for Fischer's speech and we'll have full coverage if Cashin's prediction that Fischer talk turns out to be a market mover comes through.