Moments ago, the text from Powell’s speech was released, strongly suggesting Powell is finally bowing to Trump’s demands to slash interest rates. The effects on futures were immediate. Equities are flying higher:
Powell Caves!
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Jackson Hole Week – with Implications
Jackson Hole week is often used as a policy bull horn
It is clear that the market is taking some froth off the top of several recently over-bullish areas (everything from Palantir/AI to MP Materials/REE are taking haircuts) and it is doing it with fear of the Fed as rationale. This could paint the current market turbulence in these and other areas as brief, depending on what comes out of the Fed’s orifice at week’s end.
The Fed has traditionally used this getaway as a pulpit from which to hint about coming policy. With slipping economic signals (everything from employment to commercial real estate) continuing apace, I don’t think that the inflation jitters instigated by last week’s PPI report will stack up against the decelerating economy. That report was not inflation, after all. It was the effects of fiscal (tariff/trade) policy.
(more…)Next Week’s Big Event
Powell Yammer
Jerome Powell is supposed to be speaking right now (as of this composition, the winner of the World’s Most Annoying Female Voice is having her turn on stage). Anyway:
Fed Leak
I have acquired through surreptitious means two portions of the Fed press conference speech that are guaranteed to be there.
How many lies can YOU spot? I’ll give you a free one: that last sentence.
