The Fed is "not speaking anymore"! Deutsche Bank: Silent periods often accompany policy turning points

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Federal Reserve officials collectively fell silent after the June FOMC meeting, attracting significant market attention. According to the latest research from Deutsche Bank, this round of speeches is unusually sparse; historically, similar periods of silence have often occurred around pivotal points in monetary policy shifts, so investors should remain alert.

Deutsche Bank’s fixed income strategy team noted in a June 30 report that in the two weeks following the conclusion of the June FOMC meeting, the frequency of public speeches and media appearances by FOMC members was noticeably low, even by historical standards, though still within the historical range. Strategists like Matthew Raskin at Deutsche Bank believe this phenomenon may indicate the Fed is moving toward a form of tightened communication.

It is worth noting that previous periods with similarly sparse speeches coincided with key points of obvious policy shifts—including July 2019, January 2022, and July 2023—when the Fed was likely aiming to deliver a more unified and controlled policy message externally. This pattern further increases uncertainty around the current policy direction of the Fed in the market.

Historical Data: Silence Often Precedes a Turning Point

Since taking office, current Fed Chair Walsh has made several adjustments to the Fed’s communication strategy. In the latest press conference, Walsh deliberately avoided providing forward guidance and restrained from interpreting policies beyond the published statements, unwilling to elaborate on the committee’s decision-making process. Meanwhile, at the June meeting, Walsh announced the establishment of five Fed working groups, the first of which focuses on external communication mechanisms.

The Deutsche Bank strategy team, using the Bloomberg economic calendar, counted the number of Fed officials’ speeches and media appearances within the two weeks after each FOMC meeting as a proxy for communication density. To eliminate seasonal effects, data following December meetings were excluded, as that period is traditionally sparse due to holidays.

The data shows that this current round of post-meeting speeches is indeed low in number, but has not yet hit the historical minimum. Three comparable historical periods: July 2019 (when the Fed began a rate-cut cycle), January 2022 (when the Fed shifted to aggressive rate hikes), and July 2023 (rate hike cycle nearing its end). These periods share the trait that the Fed faced major policy choices and preferred to maintain a more unified message in public.

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The above content comes from Chasing Wind Trading Desk.

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