But The Textbook…

But The Textbook…

The Fed was poised to be the only game in town Wednesday, with traders and investors looking for (demanding?) answers to a bevy of questions. It seemed unlikely all of those inquires (many of which have found expression in the bond market) would be addressed. But maybe it's what the statement, projections, dots and Jerome Powell don't say that's more important. He's been mercilessly lampooned for the 2019 policy pivot, which critics contend showed Powell is "no different" from his predecessors
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5 thoughts on “But The Textbook…

  1. If by some miracle we see the Dem’s take out the filibuster and pass voting rights then perhaps there is a chance… a very small chance that we see them move on to a huge infrastructure bill and after that maybe… just maybe they take action against corporate wage fixing. Until then wages will basically never go up meaningfully except at the minimum level occasionally and the maximum levels regularly.

  2. The dovish case in td’s table has no mention of SLR, WAM, twist, or any other form of ycc. Would it be a red light or even yellow for rate rises without Powell putting his money where his mouth is?

    Maybe I’ll eat my words, who knows.

    1. Because WAM and twist aren’t on the table right now. There was zero chance of those being announced at the March meeting. Powell will obviously allude to WAM but an official announcement on Wednesday would be a massive dovish surprise — effectively that’s just a right tail risk.

      On SLR, Zoltan effectively said it doesn’t matter on Tuesday evening. So, apparently, that’s a non-issue regardless if you take his word as gospel, which it kinda is considering where he’s probably getting his information.

      1. Understood. My point is that i’m skeptical that fed jawboning will be considered dovish enough for a bull flattener if all we’re talking about is withholding hawkish moves without mention of fresh dovish ones.

  3. Work from home is here to stay (deflationary).
    Going out to a restaurant that has tight, indoor only seating sounds unappetizing.
    I do not know anyone making big travel plans, especially outside the US, because “Yeh! Covid is over!”
    Most resumed travel plans seem to be “low-key” catching up on visiting friends and family, not “let’s go to Europe or to a big US city, stay in a crowded hotel, go out to over-eat in packed, but charming, restaurants, go to museums and/or sit in other crowded indoor venues with unknown homo sapiens who are potentially carrying a variant of covid that my (still hoping to get soon) vaccine may or may not protect me from.
    How effective is the regular flu vaccine, again?
    On top of that, some people, who did not lose their jobs during covid, got to experience what it is like not to spend everything they make and have some savings/cushion. Definitely, stress reducing – so unlikely that spending fully ramps up and credit cards are “ re-loaded”….at least for awhile.

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