Skate to Where the Puck is Going
Despite Market Pullback, Jackson Hole was Nothing of Substance
Fed Chair Jerome Powell took to the microphone on Friday afternoon for the first time since he announced the Fed’s prior 75 bps rate increase. Powell has mastered the art of tactful political speech, as he used 10 minutes of words to say nothing of substance. While there was a small corner of the market that thought Powell would cavalierly announce the end of this tightening regime, most expected him to do precisely as he did – stymie overzealous doves that were high off the recent summer rally by using his oft-repeated rhetoric about preserving price stability while remaining data dependent thus leaving the door open for lower rate increases through the balance of the year.
We found the analysis below, put together by Jack Farley (@jackfarley96) at Blockworks, quite interesting. While not exactly something we would trade off of, it is fascinating to see how over the past 24 months, the Fed’s interests have shifted from jobs and supply-side effects of inflation to instilling fear in the market through hawkish language.
If anything, this should serve as another reminder that Powell and the Fed have been, and likely will continue to be, backward-looking. While this can be frustrating, it makes sense that our Central ...