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Market participants now anticipate that the Federal Reserve will now shift towards a 50-basis point hike in its next meeting in December following four consecutive 75-basis point hikes that took its toll on assets across the globe, including equities and bonds.

The SPDR S&P 500 ETF Trust (NYSE:SPY) has lost 15.78% since the beginning of the year while the Vanguard Total Bond Market Index Fund ETF (NASDAQ:BND) shed 13.8%.

According to the minutes of the Fed meeting released last week, the central bank reiterated its previous intentions to do whatever it takes to bring inflation down but said it may soon begin to soften its tightening measures.

Expert Take: Julia Coronado, founding partner at MacroPolicy Perspectives, told Bloomberg that Powell will probably use the speech to be hawkish and describe the dimensions of imbalance in the labor market. Powell could frame those labor market dynamics as “a reason that they need to be committed to a tight policy for longer,” Coronado said according to the report.

Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., told Bloomberg, “I don’t think there’s a lot of heavy lifting to do in terms of getting the market in line with where they likely see things going.”

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