Clearly, the market is loving the notion that Jerome Powell is going to favor a rollback (or at least a rethink) of the post-crisis regulatory regime.
Powell’s exchange with Elizabeth Warren underscores the notion that the new Fed chair is generally aligned with the administration’s stance, a stance that’s been on full display this week as Trump moves in to commandeer the CFPB.
As Bloomberg recounts, “one-minute volume in S&P 500 e-mini futures surged at 11:35 a.m., coinciding with the rally in the cash market” which took the S&P to an intraday record of 2,614.05:
“I’m guessing the market is warming up a lot to Powell,” Baird’s Michael Antonelli said, before recounting Powell’s comments on financial regulation as follows: “‘We’ve had eight years now of writing new rules and honestly I can’t really think of a place where we are lacking in an important rule.’ That’s a market friendly comment.”
Here’s the exchange with Warren:
Before you go buying into the bullshit you’ll invariably read about how this amounts to Powell “standing up to Warren” and about how “more regulation doesn’t equal better regulation”, just remember that those words are usually of the “famous last” variety.
“Less regulation” always sounds good – right up your 401k disappears before your very eyes.