I thought the comments from Powell today were more-dovish than at the FOMC press conference. He repeatedly emphasized risks to the jobs market, noting that the jobs market had softened over the summer.

“I can’t say that the labor market is really solid anymore,” he said.

He offered some token comments about inflation risks but also said that he thinks tariff inflation will be passed through by year end. Given that timeline and monetary policy lags, that’s as close as you’re going to get to him endorsing the market-implied path of about 100 bps in easing in the coming 12 months.

The FX market responded with some mild US dollar selling and that let the euro challenge the highs of the day at 1.1820. It wasn’t able to get above though and remains in a tight range today.

Bond markets pushed yields lower with US 2s down 1.5 bps on the day to 3.588%.

Overall it’s a small move but the direction is dovish.