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CNBC Gives Fed A Mulligan As John Williams Explains What Powell Actually Meant

A little less "plain English" and a little more of this.

A little less "plain English" and a little more of this.
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8 comments on “CNBC Gives Fed A Mulligan As John Williams Explains What Powell Actually Meant

  1. That interview (BS) was so out of line and so much part of the business as usual formulation of the last several years as to be offensive.
    The whole affair , predictable as it was represented a made for consumption by the anguished public event. It appears to imply a unidirectional market is an entitlement. CNBC at it’s finest….

    • or it implies that Jerome Powell doesn’t know what he’s doing and the rest of the Fed realizes it. which is what I said on Wednesday.

      • Or made Powell is the just pull the band-aid off type of guy…this is the reality…it is what it is…deal with it?

      • Nobody at the Fed knows what they are doing. Seems to me thats how we got where we are. If we want the Fed to play Jesus why don’t we just have congress pass a law that says the Fed must buy $X of SPY to ensure that the market returns annualized gains of 6-10% every year.

  2. And look, don’t mistake my position on this. I’m a long-time critic of these policies. That said, just because you’ve got the right idea (i.e. rolling them back) doesn’t mean you can just say “well, our heart’s in the right place, and that’s all that counts.”

    I mean, you have to get the mechanics of this right. If I wanted to go hand out Christmas presents at the cancer ward, that would be a very admirable thing of me to do, but if I drive 145mph and kill six people on the way there, then it’s not clear whether, on balance, I did the right thing.

    • Harvey Cotton

      I am at a loss at what, precisely, you want Powell to do. The rate increases have been communicated in advance by the dots and a hawkish tone in press releases and Fed speeches. The markets still largely ignore them. The drawdown in the Fed’s balance sheet had been communicated years in advance and is going exactly as stated without deviation. The Fed had warned about leveraged loans since 2014. The Federal funds rate is still at a piddling 2.5% considering the United States has full employment, a trillion dollar a year deficit and growing, and a decelerating – but a still strong and growing – economy.

      The Fed did not create a liquidity mismatch in leveraged loans mutual funds. The Fed did not create ETFs that distort individual companies’ market performance. The Fed didn’t price Chipotle stock at $730 a share.

      If you want the market to have a say in what the Fed does, you know what their policy will be: Perpetual punch bowl. ZIRP and NIRP and QE infinity. Jay Williams said sweet nothings and put on nice lipstick and a pretty wig, and the market cared for about twenty minutes. There is a fundamental disconnect in what the market wants, and what the Fed is statutorily committed to doing.

  3. Depends on who those 6 were…

  4. Maybe the new Fed Chairman can guarantee stock prices next, to mitigate market run(over)s.

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