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‘Persistent’
Jerome Powell was asked on Wednesday if, and to what degree, the recent selloff at the long-end of the US Treasury curve stood in for Fed action at the November FOMC meeting.
That was the question. While editorializing around the new policy statement, I briefly recapped recent events: Officials spent the better part of October explaining how and why the rapid rise in long-end US Treasury yields witnessed since early August could theoretically substitute for a rate hike, or anyway assist the Fed
The Fed was “done” a couple meetings ago, and is “well done” now. Of course there is some economic scenario that would push the Fed out of “watchful waiting”, but absent significant and sustained inflation re-acceleration, or a major economic deterioration or financial breakage, the Fed is now a non-factor. It feels like a long time since one could last say that.
I think Chair Powell is getting better at this. His non-answer answers help keep the fast-money folks from calling the shots. If Powell’s legacy as Fed chair is that he got the horse back in front of the cart, well, that would be a good thing.