“Upcoming”, the “hawkish” word

This from today´s Congressional Testimony:

Incoming data suggest that labor market conditions continue to strengthen and inflation is moving up to 2 percent, consistent with the Committee’s expectations. At our upcoming meetings, the Committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.

This from the February 1st Statement:

The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

They say the same thing, so why immediate market reaction was so strong, with 2-year and 10-year yields jumping?

These are alternative synonyms for “upcoming”: “Imminent”, “Approaching”, “Coming” and “Future”. Maybe the markets made an association with “imminent” or “coming”, when the more logical, given “upcoming” was followed by the plural “meetings”, would be to associate with the synonym “future”, in which case the statement was not more “hawkish” than previously.

In any case, according to CME Group, the chance of a rate hike in the March Meeting climbed from 13% to 17.7%

As has happened during the last several weeks, yields and the dollar will likely “cool down” again.


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