A First Foundation Blog

The Week Ahead – More Fed Speak

Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week. 

Stocks were down for the third week in a row, with the S&P 500 falling 3.2% last week, carrying over the concerns from the previous week’s highly anticipated Federal Reserve meeting in Jackson Hole. Reality has set in; the Fed has committed to restoring inflation to 2%, aiming to cool demand by implementing a long-lasting restrictive monetary policy. Markets are now unwinding the rate cuts priced in 2023, and equity markets are in search of a new equilibrium that doesn’t involve easy money coming to the rescue anytime soon. Such equilibrium will likely require cheaper equity valuations and/or more substantial earnings growth. Restrictive monetary policy, for an extended period, is something that many did not want to recognize some weeks ago as ebullience around a potential “Fed Pivot” reverberated throughout markets.

Fed speakers last week backed up Chair Powell’s Jackson Hole rhetoric with comments on higher rates, encouraging tighter financial conditions, and commitment to reducing inflation even if a recession ensues. With several more speaking engagements from Fed officials this week, including Chair Powell, Vice Chair Brainard, Governor Waller, and President Mester, the focus will now shift to the August CPI release (Sep 13), as the timing of both Chair Powell’s and Vice Chair Brainard’s speeches ahead of the Sep 10 blackout period is potentially significant. The release of CPI data in the blackout period – similar to the June FOMC meeting – creates communication challenges for the Fed. Thus, the Committee may deem it necessary to signal the likely size of a September rate hike before the blackout period starts through any of the speeches this week.

This week will be relatively quiet in terms of data releases. The only meaningful information will be provided by the August services ISM, forecast to worsen, consistent with a slowing economy. In addition to the speaking engagements from Fed officials this week, significant attention will be paid to the events in Europe this week, where the ECB will announce an expected rate hike and an Extraordinary EU Council will be held to seek solutions to the regions rising energy prices as the calendar rolls towards the winter months.

Data deck for September 2 - September 9:

Data Deck 9.2 - 9.9



Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by First Foundation Advisors), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from First Foundation Advisors. Please remember that if you are a First Foundation client, it remains your responsibility to advise First Foundation, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. First Foundation Advisors is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the First Foundation Advisors’ current written disclosure statement discussing our advisory services and fees is available for review upon request, or at  Please Note: First Foundation Advisors does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to First Foundation Advisors’ web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Calvin Jones, CFA, Managing Director of Fixed Income
About the Author
Calvin Jones, CFA, Managing Director of Fixed Income
Mr. Jones is a senior member of the First Foundation Advisors investment management team and is responsible for working closely with First Foundation’s financial advisors to develop investment strategies utilizing income assets to help clients achieve their financial goals. In his role, Mr. Jones serves on the company’s Investment and Asset Allocation committees and is responsible for leading and overseeing the firm’s fixed income assets. Mr. Jones joined First Foundation Advisors in 2011. His previous experience at ProShare Advisors included trading and analysis in global equity and derivatives markets for the world’s largest manager of leveraged and inverse funds. Mr. Jones earned a Bachelor of Engineering degree from the University of Pittsburgh and a Master of Science in Mathematical Finance degree from the University of North Carolina at Charlotte. He is a member of the CFA Institute and the CFA Society of Los Angeles. Read more