Today features a limited data release, with the NY Fed Inflation Expectations survey being the only item on the schedule. This survey may provide insights into long-term inflation expectations, which some believe are overlooked due to perceived biases in the UMich survey.
Recent data releases, such as the US CPI, PPI, and the UMich report, have not received much attention from the market. Instead, focus has shifted to tariff negotiations, particularly those involving developments between the US and China.
Central Bank Speaker Appearances
There will be appearances by central bank speakers today. At 16:00 GMT (12:00 ET), Fed’s Barkin, who holds a neutral stance and is a non-voter, will speak. Following him, Fed’s Waller, also holding a neutral stance but a voter, will speak at 17:00 GMT (13:00 ET).
That the day’s economic calendar is sparse presents a kind of stillness in the usual rhythm of market catalysts. The sole item with potential influence—the New York Fed’s inflation expectations survey—tends to be seen as more reliable for long-term outlooks than the University of Michigan’s version, which some argue is prone to overreact to short-term consumer sentiment shifts. The market often views the New York survey as steadier, thanks to its consistent methodology that focuses more on actual economic indicators than the mood of the moment.
Recent top-tier data including CPI, PPI, and the University of Michigan survey didn’t manage to shake markets, and there’s good reason for that. What we’ve seen in reaction patterns lately shows that traders have turned their attention elsewhere, namely to political signals and trade tensions between Washington and Beijing. It’s not that the economic data wasn’t meaningful—it simply wasn’t where expectations are being re-set right now.
Instead, traders are calibrating to external variables that aren’t found in models, especially those involving policy positioning and tariff rhetoric, which tend to hit sentiment more directly and unpredictably. These kinds of developments frequently dominate short-term positioning and can skew volatility around options expiry.
Market Impacts Of Fed Commentary
This context makes today’s Fed commentary potentially more impactful than it would appear from a glance at the calendar. Barkin is on deck first, with a track record for striking a balanced tone. Even though he doesn’t vote this year, his remarks could add colour to recent communications from the central bank, particularly if he touches on inflation persistence or risks to the soft landing narrative. Waller, with voting power and recent hawkish leanings, follows shortly after. Traders who monitor probabilities for policy moves into year-end will want to focus on Waller’s tone, word choice and, more importantly, whether he reinforces or challenges the market’s pricing on cuts.
For us, this sequence of speaking engagements matters because we’re facing an unusually narrow window where central bank language can influence implied volatility more than realised data. We’re still dealing with an options market that is reluctant to lean heavily in either direction, particularly ahead of the next CPI print, but any deviation from the expected script today could shift that posture.
We should consider that forward vol remains underpriced for macro risk next month. Hedge structures relying on low decay positioning might need to be revisited before end-of-week. Even small surprises in today’s speeches could cause leveraged strategies relying on low spot gamma to be tested, particularly in S&P and front-end Treasury options.
As tariff headlines skew risk appetite, and with central banks remaining the only formal signal providers on inflation tolerance, it’s this kind of session—quiet on paper—that tends to reward those who’ve set exposure carefully. The next few days offer little in data terms, but not in terms of direction.
