Complicated Hypotheticals
It'll likely take "longer than previously expected" for Fed officials to gain sufficient confidence in the disinflation path to brave rate cuts. Beyond that, Jerome Powell's flying just as blind as anyone else.
That was the overarching message from a somewhat raspy Powell on Wednesday, when the Fed left rates unchanged for a sixth meeting and lamented a "lack of further progress" towards the Committee's inflation target.
Powell's responses and rejoinders during the post-meeting press conferenc
Imagine the task that faced a mainstream financial press blogger this afternoon.
“Stocks Surge in reaction to Powell reassurance of no rate hikes.”
“Stocks gain further on investor hopes of eventual cuts as a boost to earnings.”
“Stocks Falter as Investors Reassess Powell’s Comments.”
It must be a little embarrassing for the sentient ones who realize what they write has no relation to what was pushing stock prices up and own today.
Ah well. It must not be easy.
There are so many people who will be outraged by this but… It could be worse.
I think the only thing that we can be sure of about Powell is, he’s not telling us what he really thinks.
Plain English?
I missed Powell’s presser b/c traveling…and chose not to pipe it in. Thanks for confirming I made a good choice.
I remember when obfuscation was an admired skill of Fed chairs. You could listen to an entire Greenspan presser and be none the wiser.
Seriously, Powell’s position seems quite clear. He is not yet ready to lower rates. He does not expect to raise rates. He is not going to tell you when the next move will be. Deal with it.
The problem is Powell isn’t any good at obfuscating. As some readers will doubtlessly recall, I warned early and often that “plain English” would backfire on Powell under all but the most benign macro circumstances. You have to be able to traffic in indecipherable academic doublespeak as a modern central banker, something Powell can’t do because i) he’s an honest guy, but more importantly ii) he’s not an academic. So when he tries to obfuscate, it comes across as just what it is, whereas with his three immediate predecessors, it sounded more like a golf tournament on a Sunday afternoon: Noise you could nap to.