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

Case growth outpacing testing in coronavirus hotspots

Data: The COVID Tracking Project. Note: Vermont and Hawaii were not included because they have fewer than 20 cases per day. Chart: Andrew Witherspoon/Axios

The United States' alarming rise in coronavirus cases isn't due to increased testing — particularly not where cases have grown fastest over the last month.

Why it matters: The U.S. doesn't yet know what it looks like when a pandemic rages on relatively unchecked after the health system has become overwhelmed. It may be about to find out.

The impending retail apocalypse

Illustration: Eniola Odetunde/Axios

Because of the coronavirus and people's buying habits moving online, retail stores are closing everywhere — often for good.

Why it matters: Malls are going belly up. Familiar names like J.C. Penney, Neiman Marcus and J. Crew have filed for bankruptcy. Increasingly, Americans' shopping choices will boil down to a handful of internet Everything Stores and survival-of-the-fittest national chains.

Biden campaign using Instagram to mobilize celebrity supporters

Collins appears on the Build live interview series in November 2019. Photo: Gary Gershoff/Getty Images

The Biden campaign is launching a new initiative today that will draft Hollywood celebrities for Instagram Live chats with campaign officials and other Biden supporters.

Why it matters: The campaign, called #TeamJoeTalks, is an attempt to open up a new front on social media, drawing on celebrities’ Instagram followers to help find and motivate voters while large parts of the country remain locked down.