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They’ve Done Studies You Know…

60% of the time...

Ok, so we got through the first of two Powell testimonies, and it went ok, all things considered. The message was mildly hawkish on balance and the result for yields, the dollar and secondarily, for stocks, was predictable. The comments that set the tone came early on when Powell suggested that his outlook on the economy had improved of late and although he said he "wouldn’t want to prejudge" anything about the rate path, he noted that for him, the data "add some confidence to the view that inflation is moving up to target." “We’ve also seen continued strength around the globe, and we’ve seen fiscal policy become more stimulative," he added.   Treasurys dropped on those comments as 10Y yields quickly moved above 2.90. Zooming in on 2Y yields just as the comments excerpted above hit, you can really see the impact: And predictably, that's when it started to go south for stocks - you can see it clearly in futs: In case you were wondering, real yields (rhs, inverted) were in the driver's seat: So it should come as no surprise that by the end of the day, rising yields translated into falling stocks. And not just falling stocks, the worst day for U.S. e
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1 comment on “They’ve Done Studies You Know…

  1. Curt A Tyner says:

    http://www.chapwoodindex.com/

    The hoax continues and the lemmings just keep writing and writing day in and day out.

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