Fed Speaks, Congress Returns Next Week Array ( [cookie] => 38bc7a-aa3424-337639-f96d2b-e9393b [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 0 [subscriber] => 0 [role] => [visitor_id] => 207711 [user_id] => [reason] => [method] => ) 1 and can accesss
As expected, the Fed ended its January meeting with yet another clear signal that rates are going up in March. As I have written, Fed Chairs can either surprise markets with rate changes or telegraph policy so that markets have time to adjust. Chair Powell has clearly been in the camp of signaling change, and in my view could not be clearer about the change in policy.
Chair Powell is also cognizant that between now and the March meeting he has a confirmation vote in the Senate. Progressives, led by Senator Elizabeth Warren, have made clear they oppose a second term for the Chair; hence, he will need some Republican votes in a 50/50 Senate. The last thing Powell wanted to do at the regular post-FOMC presser was to say anything that would make Fed policy partisan. Inflation and the role of the Fed has the potential to get partisan and the Chair seems to have found middle ground that should keep his re-nomination for a second term on a smooth path.


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Thomas J. Lee
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