NFP Just Got A Lot More Interesting
Yes this week is NFP, and yes NFP hasn’t been the same focus point it was before the pandemic. However, this week’s Jackson Hole Symposium saw the FED take a fundamental shift in the way they look at inflation and employment, and means jobs data will become even more important than usual.
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This week’s Jackson Hole Fed Symposium delivered on market expectations when Jerome Powell announced changes to their policy framework.
Apart from confirming that they will be adopting average inflation targeting, the more interesting change from the FED was their change regarding employment. Even though maximum employment is part of the Fed’s dual mandate, the biggest focus has arguably always been on inflation.
However, going forward, it seems like the FED will turn more of their attention to the labour market instead of inflation. The overall message seems to say that they won’t be too worried about inflation, and will rather look to make policy decisions that brings employment back to target.
This is a significant and fundamental shift for the bank, and also means that jobs data just got a lot more interesting going forward. With a week full of important employment data points, it’s bound to create some tradable volatility.
This week’s video will help you prepare for the upcoming events and provide insights into how you could possibly trade them as well.
Highlights of the video:
00:05 – Current Baseline
02:36 – Baseline expectations for the upcoming risk event
03:54 – Sentiment Shifts & Trade Plan
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