# Block 016 — Fed communication & reaction function

**Status:** ✓ done (Session 24, 2026-07-14)
**Phase:** Phase 1 (Rates)

## Topic scope

How to read the dots, the SEP, the press conference language. What each Fed governor's commentary signals. Fed minutes reading methodology. Forward guidance evolution.

## Plan
**Prerequisite:** Block 00a (rubric), Block 00b (anti-patterns). Fed-comms trade construction uses the rubric; narrative-without-pricing anti-pattern is a real risk.

**Pre-read (assigned 2026-07-12, Session 22 close — Block 015 close; re-confirmed 2026-07-14 Session 24):**

- **Hull 10e Ch. 30** (Interest Rate Derivatives: HJM and LMM) — substrate gap noted (HJM/LMM, not monetary policy), teach-filled inline
- **Bernanke 2004** "The Great Moderation" speech — confirmed clean
- **Powell speeches 2018-2026** — 2018 "long way from neutral", 2020 framework review (FAIT), 2022-2023 hiking cycle — all confirmed
- **FRED series FEDFUNDS, DFEDTARU, DFEDTARL, SOFR** — confirmed clean

**Status:** ✓ done (Session 24, 2026-07-14). Main material delivered: 4 concepts (reaction function as operating manual, reaction function vs. forecast vs. commitment, market reading the reaction function with two-ordering framework, live read mid-2026 balance-sheet channel) + 1 live-data probe. 8 Anki cards pushed (note IDs 1784060117542-1784060117585). Block 015 cold-recall re-drill: 3 items back to Working+, 1 sequence slip resolved, 1 item still at Working (FRED breakeven series — DFII10 = real yield precision slipped again; re-drill card pushed as Card 7). Source: session-log.md Session 24.

## Carry-forward to next block

Block 016 → done. Block 017 (curve regime classification) → next.

**Pre-read for Block 017 (assigned 2026-07-14, Session 24 close):**

- **Hull Ch. 4 (Interest Rate Forwards)** — forward rate derivation + forward-curve shape (~15 min, [thematic])
- **BIS yield curve regime papers** — read 1-2 of: BIS Quarterly Review 2018 "Unconventional monetary policy and shifts in the yield curve" + BIS Bulletin 2022 "Steepeners, flatteners and the term premium" (~20 min, [thematic])
- **FRED series T10Y2Y, T10Y3M, BAMLC0A0CM, BAMLH0A0HYM2** — bookmark + read methodology pages (~5 min, [orientation])

**Skip:**
- Detailed term-premium decomposition (covered in Block 020 ACM)
- Forward rate agreement (FRA) mechanics (Phase 2 territory)
- Full Coibion-Gorodnichenko literature review on expectations

**Total: ~40 min, [thematic].**

**Cold-recall re-drill queue carried to Block 017:** 1 Block 016 item still at Working (FRED breakeven series — DFII10 = real yield precision slipped twice; Card 7 from Session 24 is the re-drill, precision needs verification on next cold-recall pass). User reports Anki drills done post-Session 24.

**Status:** ✓ done. Session 24 close. Block 017 → current. Source: session-log.md Session 24 + [[pre-reads]] updated.