Fed officials cannot talk about interest rates this week, and that makes the Fed blackout period unusually loud for investors. The quiet window runs from Saturday, Oct. 17, through Thursday, Oct. 29, according to Kiplinger’s weekly economic calendar, so no one at the central bank is scheduled to speak between now and the next decision. With a hot inflation report fresh in everyone’s memory, the data will do the talking.
This is a guide to the nine reports on the calendar, what each could tell you, and why one number matters more than the rest. It is general information, not financial advice.
In this article
- Why the Fed blackout period raises the stakes
- The nine reports, day by day
- The inflation backdrop
- What markets were pricing
- What a surprise would look like
- How to read the week as a saver or borrower
- Editor’s take
Why the Fed blackout period raises the stakes
Before each rate decision, Fed officials stop giving speeches and interviews about policy. The idea is to let the decision stand on its own and avoid hinting at it in advance. The side effect is that markets lose their usual stream of clues, and any surprise in the data gets more attention than it would on a normal week.
The timing is awkward. Kiplinger notes that cost pressure is the common thread for consumers and businesses right now, pointing to a hot September CPI report and an even stronger producer price report. The New York Fed’s September survey of consumer expectations, released Oct. 7, showed short- and medium-term inflation expectations ticking higher, while long-term expectations stayed stable. Fed Chair Kevin Warsh said in August that “It’s the Fed’s job to make sure that inflation expectations do not get unanchored.” Long-term expectations are the line he is guarding.
The nine reports, day by day
All times are Eastern. On Monday, Oct. 19, the 10 a.m. NAHB Housing Market Index for October is expected to point to strain in housing construction and sales. Tuesday brings housing starts for September at 8:30 a.m. and pending home sales for September at 10 a.m. Wednesday has no economic reports scheduled.
Thursday has three: weekly jobless claims for the week ending Oct. 17 at 8:30 a.m., the Conference Board’s Leading Economic Index for September at 10 a.m., and the Kansas City Fed manufacturing survey for October at 11 a.m. Friday closes the week with S&P Global’s flash services and manufacturing PMIs for October at 9:45 a.m., followed by the final University of Michigan consumer sentiment reading for October at 10 a.m.
If you only have time for three, watch housing starts, jobless claims and the Michigan sentiment survey. Housing shows how rate-sensitive parts of the economy are coping, claims are the fastest read on the labor market, and sentiment includes consumers’ own inflation expectations, which is the number the Fed says it cares about most.
The inflation backdrop
The September report from the Bureau of Labor Statistics set the tone. Consumer prices rose 0.6% on the month, up from 0.4% in August, and 3.7% over the past 12 months, up from 3.4%. Energy did most of the damage: it rose 5.2% in September and 20.4% over the year, and gasoline alone rose 9.1% on the month and 34.2% on the year, accounting for over half of the monthly increase.
Strip out food and energy and the picture looks calmer. Core prices rose 0.3% on the month and 2.6% over the year, up from 2.4%. Shelter rose 0.4% on the month and 3.2% on the year, and food was unchanged on the month. That gap between 3.7% and 2.6% is the whole debate: if energy is the main driver, a rate hike does little to fix it, but if it leaks into expectations, the Fed may feel it has to act. The next CPI report is not due until Nov. 10.
What markets were pricing
As of Friday, Oct. 16, a Schwab market update said the odds of a hike this month had fallen to about 17%, while markets still priced a hike before year-end at above 90%. The 10-year Treasury yield was around 5.10% that morning, and it had dipped on Thursday to its lowest level since Sept. 23. Analysts quoted by Schwab said it was too early to call the yield move over.
Those are snapshots from last week, not a forecast, and they can change with one data release. That is precisely why this week’s reports matter. A weak claims number or soft housing data could shift the odds, and so could a surprise on the Michigan survey. For the stock-market side of the same story, see our look at the Nasdaq’s worst week since June.
What a surprise would look like
A surprise in either direction would be informative. Weak housing starts and a jump in jobless claims would suggest the economy is slowing under higher borrowing costs, which would make a further hike harder to justify. Strong flash PMIs and firm sentiment, on the other hand, would back the idea that demand is holding up despite the price pressure, which keeps the hawkish case alive.
Mixed results are the likeliest outcome, and that is fine. The point of reading the week is not to predict the decision, which depends on more than one data point, but to see which way the evidence is leaning before the Fed blackout period ends and officials start speaking again.
How to read the week as a saver or borrower
If you are a saver, the rate path matters for what your accounts pay, and the recent move is covered in our piece on savings rates after the Fed hike. If you are a borrower, the 10-year yield tends to matter more for mortgages than the Fed’s own decision, so keep an eye on it through the blackout.
The practical takeaway is modest. You do not need to react to any single report, and a Fed blackout period is a poor moment to make big moves based on one number. Write down the rates you care about, check them after Friday’s data, and compare again after the decision.
Editor’s take
Watch the Michigan survey’s inflation expectations, not the headline CPI. Energy-driven inflation can fade when oil does, but expectations that drift higher can become the thing the Fed actually acts on, and Chair Warsh has said as much. If expectations stay anchored this Friday, the case for a hurried move gets weaker. If they slip, the quiet week may end loudly.
What to watch next: the final Michigan reading on Friday, then the first statements after the Fed blackout period ends on Oct. 29.
