Federal Reserve Board Chairman Jerome Powell walks up to speak during a news conference. Photo: Mark Wilson/Getty Images

The market has stopped paying much attention to Fed Chair Jerome Powell's long-range forecasts and the Fed's future guidance and will merely be looking for confirmation of its expectations at this week's Fed meeting.

The state of play: Markets are now looking to data — including the value of the stock market — rather than central bank predictions as the road map for policy.

Background:

  • When Powell and the Fed predicted they would raise rates three times this year in November, the market priced in a 20% chance of it happening and had written that down to 7% by the end of the month, CME Group's FedWatch tool shows.
  • When the Fed lowered that prediction to two rate hikes in December, the market priced in a 9% chance of 2 hikes and by month end had cut the probability to 0.5%.
  • Powell has stressed at every meeting in 2019 that the central bank will be "patient" and "on hold" this year, but the likelihood of that being the case peaked in March at 96% and has fallen since.
  • Fed fund futures prices show investors see just a 1% chance interest rates remain in their current 2.25%–2.50% range by the end of December.
Expand chart
Data: CME FedWatch Tool; Chart: Chris Canipe/Axios

The big picture: Not only does the market see virtually no chance the Fed continues to hold, futures prices show investors see it as more likely that Powell and company cut rates at every meeting this year.

Why it matters: Though no rate changes are expected, with meetings this week from the Fed, Bank of England and Bank of Japan, investors are expecting that central banks will again pivot and signal another round of coordinated global policy easing is coming to flood the world with more capital and liquidity.

  • At this time last year, the market was expecting global coordinated tightening to slow speculation and rein in asset bubbles.
  • There's also growing worry that monetary policy is losing its effectiveness and an expectation that central banks will be forced to resort to more extreme and unusual measures to stimulate the weakening economy.

Flashback: The Federal Reserve looks to be laying the groundwork for interest rate cuts

Go deeper

Dion Rabouin, author of Markets
37 mins ago - Economy & Business

The holiday shopping season will now begin in October

Illustration: Eniola Odetunde/Axios

Amazon's decision to move its Prime Day to Oct. 13–14 this year will pull the whole holiday shopping season forward by more than a month and help make online retail bigger than ever, as more families shop electronically and jostle to get presents purchased ahead of December holidays.

Why it matters: The reality of the coronavirus pandemic pushing people toward e-commerce combined with the pull of Amazon Prime Day and the Christmas shopping season this year are setting up a bonanza for retailers — but only those with the ability to offer steep discounts, delivery and an attractive online platform.

Updated 42 mins ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7:45 a.m. ET: 34,010,539 — Total deaths: 1,014,958 — Total recoveries: 23,662,200Map.
  2. U.S.: Total confirmed cases as of 7:45 a.m. ET: 7,234,257 — Total deaths: 206,963 — Total recoveries: 2,840,688 — Total tests: 103,939,667Map.
  3. Education: School-aged children now make up 10% of all U.S COVID-19 cases.
  4. Health: Alarming vaccine skepticism. Moderna says its coronavirus vaccine won't be ready until 2021
  5. Travel: CDC: 3,689 COVID-19 or coronavirus-like cases found on cruise ships in U.S. waters — Airlines begin mass layoffs while clinging to hope for federal aid
  6. Business: Real-time data show economy's rebound slowing but still going.
  7. Sports: Steelers-Titans NFL game delayed after coronavirus outbreak.

America's nightmare foretold

Illustration: Sarah Grillo/Axios

President Trump made it clear at the debate that he’ll continue to call the results fraudulent — and contest the outcome in key states — no matter how wide the margin. That’ll be amplified by a massive amount of disinformation, even though the platforms are trying to curtail it.

Why it matters: Back in 2000, we didn’t know Bush v. Gore was going to happen. We know this is going to happen.