Last second look at J-Hole, from Goldman rates trader George Cole: Obviously the speech is very interesting in the context of the buyback announcement, the Druckenmiller op-ed, and the July meeting, which was a head-scratcher. He seemed to endorse the idea that higher long-end yields were a reflection of the market finally standing on its own feet and getting some vol back after years of central bank repression. I think that's a somewhat false narrative, but that was the story he gave us — only for Bessent to say the market doesn't understand the fundamentals, has the price wrong. Philosophically, you can't claim to want an unpolluted read of market pricing while bullying that same market. So we'd be surprised if he re-runs the July script and celebrates the move higher in long-end yields. What we're looking for instead is something vol-reducing: marginally hawkish near term, but fundamentally calming. The market isn't worried about the Fed's stance — it's confused about what the Fed is actually doing. Three things would help: 1) a clear statement that the policy rate, not long-end yields, is the main transmission mechanism; 2) an acknowledgement that recent data has been encouraging and reaffirms recent FOMC decisions — not forward guidance, but evidence the Fed is reading the data in a familiar, sensible way; and 3) a recommitment to price stability that sounds a bit more like June. None of that is overly hawkish for the very front end, particularly if he signals inflation is heading lower, but all of it takes out risk premium. Caveat: he may just deliver a speech on international payments and financial innovation and say nothing on policy at all. We'd also keep one eye on the sideline commentary — any softening from the hawkish camp on the tapes is probably as material for near-term policy as anything Warsh says.(zerohedge)