For bond traders who want more clear policy signals, the real key event may not be Federal Reserve Chairman Kevin Walsh's speech on Friday, but Governor Christopher Waller's statement next week. Various signs indicate that Walsh's speech at Jackson Hole may continue the style that has made the bond market very distressed for several months: words of regret are like gold. This strategy means that financial markets need to rely more on newly published data to send policy signals on their own. If Walsh defined the communication style, then Waller provided a policy response function. His speech next week may provide more clues. In July of this year, Waller turned Walsh's vague statement into information that the market could actually trade. At the time, before the June CPI data was released, he made it clear that if core inflation were to heat up again, the Federal Reserve would need to consider raising interest rates in the near future.

For bond traders who want more clear policy signals, the real key event may not be Federal Reserve Chairman Kevin Walsh's speech on Friday, but Governor Christopher Waller's statement next week. Various signs indicate that Walsh's speech at Jackson Hole may continue the style that has made the bond market very distressed for several months: words of regret are like gold. This strategy means that financial markets need to rely more on newly published data to send policy signals on their own. If Walsh defined the communication style, then Waller provided a policy response function. His speech next week may provide more clues. In July of this year, Waller turned Walsh's vague statement into information that the market could actually trade. At the time, before the June CPI data was released, he made it clear that if core inflation were to heat up again, the Federal Reserve would need to consider raising interest rates in the near future.