Market Shrugs off Hawkish Fedspeak

Market rallies despite continued hawkish commentary from Fed officials. In public comments today, Richmond Fed President Thomas Barkin said that he wants to move “more quickly” to tighten policy, while Fed Vice Chair Lael Brainard suggested that the Fed will fight inflation for “as long as it takes.” Nevertheless, the 10-year yield decreased ~9 bps to 3.263%, reversing some of yesterday’s substantial move.

U.S. trade deficit narrows. The U.S. trade deficit hit a new 9-month low, coming in at $70.7 billion in July, just above forecasts of $70.3 billion. Total exports were at an all-time high of $259.3 billion while imports decreased to $329.9 billion. Elsewhere, gasoline plunged, which eased concerns about price pressures that could hurt the fight against inflation.

Day ahead.  Fed Chair Jerome Powell’s public comments at 9:10 AM ET will headline tomorrow’s activity. Initial jobless claims and gasoline stocks change data will round out the day.