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Max Dovish
"Stocks rise, yield curve steepens" was the five-word summary for Thursday's action in US equities and rates.
If that's all you're going by, I suppose you can say Jerome Powell "succeeded" in the latest test of his capacity to communicate effectively with traders, although the gains in stocks were modest.
At times, Powell has failed to say the "right" things, let alone strike the "correct" tone, when dialoguing with fickle markets. Oddly enough, the pandemic decreased the odds of miscommunicat
Powell has it right. For the blue collar worker, It’s been 40 years of almost getting a little wage inflation and, then, the Fed inverts the curve! Maybe the economy can give back by inflating away the borrowing and boosting wage expectations.
H. I don’t know if you can graph the daily last two hours of the stock market showing the end of trading for the Dow, S&P and Nasdaq and how they swing in those last two hours over say the last 50 trading days??
I see VIX rising with equities and yields also rising. These things very rarely all go up together without it ending badly. The mid-day selloff corresponded to a big pop in VIX. The market is very fragile and possibly telegraphing a down move.
So the Fed is responding to political pressure to swerve their mandate to address inequality issues. That is so stylish. Protesters will steer clear of the Eccles building so that is a plus. This is mission creep. They are also not understanding that the structural forces constraining inflation for the past 10-years are ending. As Tim Duy asserted a while back, they are fighting the last war. When the Fed stops worrying about inflation, it is time to start worrying about inflation, a message not lost on the yield curve and 30-year breaks.