It wasn’t what he said. It was what he didn’t say.

Jerome Powell had an opportunity on Tuesday to make amends for inadvertently perpetuating 2023’s everything rally last week, but he didn’t seem especially interested. Markets are plainly prepared to rally absent a reason not to, and Powell provided no such reason in a jovial back-and-forth with David Rubenstein. Maybe it just wasn’t the right forum.

Although Powell conceded that the terminal rate may need to be higher if the US labor market continues to perform as well as heavily-adjusted statistics say it did last month, he gave no indication he’s concerned about the easing in financial conditions that invariably accompanies rising stocks.

And, so, stocks rose. The price action in bonds was distorted by heavy corporate issuance and a dreadful tail on Tuesday’s three-year sale, but if you looked close, the curve did briefly bull steepen during Powell’s chat.

“Powell’s comments were relatively benign overall; consistent with the post-FOMC press conference,” BMO’s Ian Lyngen and Ben Jeffery remarked, adding that his “decision to hold the ‘disinflation’ language, and failure to emphasize the undue easing of financial conditions was seen by many as a lost opportunity to reinforce the ‘higher for longer’ rhetoric.”

Indeed. I can say with absolute certainty that the same critics who piled on last week when stocks surged in the wake of Powell’s press conference will do the same on Tuesday evening and into Wednesday. The Nasdaq 100 rose more than 2% on the session.

To reiterate: That’s not what you necessarily want if you’re the Fed and the S&P has already re-rated from ~15X to more than 18X.

Both Raphael Bostic and Neel Kashkari went out of their way to emphasize that the January jobs report argued for a higher peak in Fed funds, and while Powell agreed with that, he didn’t make it the focal point it probably should’ve been on Tuesday.

It was no surprise that the dollar ended up lower. The intraday chart showed a swoon, a retrace and a subsequent meander to the downside as the market digested what, in the final analysis, was just a replay of last week’s press conference, only in fireside format.

If payrolls was supposed to be a game-changer, somebody forgot to tell Powell. Rubenstein tried to playfully elicit an admission that with the benefit of hindsight, the jobs print called for 50bps last week, not 25bps, but Powell laughed it off.

It’s all fun and games until you look up six months from now and can’t figure out why services sector inflation is still percolating with the S&P at 4,600.