Is the punchbowl being removed from the equity party? Will investors have to rely on seltzer now?

Hard to say with certainty, but it at a minimum it seems that the cover is back on the bowl. I’m referring here to an admonition from Federal Reserve Chairman Jerome Powell, who last Wednesday indicated that no more cuts were forthcoming, unless the U.S. economy slowed significantly.

While the Federal Open Market Committee reduced the Fed funds rate by 25 basis points to 1.50%-1.75%, just as the market expected, the bigger news was what the Fed said in its press release and afterwards. There is going to be a pause in the rate cutting trend that has seen 75 bps since the end of 2018.

“The current stance of [interest-rate] policy is likely to remain appropriate” as long as the economy expands moderately and the labor market stays strong,” he said at the press conference after the FOMC meeting ended. And there you have it—or not.

Actually, as JonesTrading chief market strategists Michael O’Rourke points out in a recent report, the key Powell sentence was this: “I think we would need to see a really significant move up in inflation that's persistent before we even consider raising rates to address inflation concerns.”

Inflation? What’s that? I’m being ...

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