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Wanted: More Confidence
The Fed's looking for "greater confidence" that inflation is moving sustainably down to 2%.
That was the key message from Jerome Powell during a repetitive post-FOMC Q&A with reporters who pressed for answers about why the Fed's seemingly not content with inflation running at, or even below, 2% on a three- and six-month annualized basis.
The short answer, of course, is that those measures aren't the target. The target is based on the 12-month rate. The longer answer, which Powell painstaki
He talked about the QT there at the end.
Based on market performance over the last little while, you wouldn’t know there was any T there at all.
So maybe the T is perhaps only a lowercase t or maybe even an E.
Seems like a balanced, pragmatic approach. Thanks for the quick note, H!
In spite of Powell’s comments reducing chances of a rate cut in March, 10 Year Treasury yields have fallen to 3.917%, down from 4.195% on 1/25. Is Yellen’s borrowing estimate cut, which led to the drop in yields trumping the Fed’s reluctance to cut rates in March? Is the market simply not believing the FOMC or Chair Powell? Rates continued to drop today….
ECI but, more importantly, NYCB, my friend.
Makes sense, NFP on Friday should be very interesting.
I read Nick T’s piece in WSJ’s op-ed page on Wed. Seems he’s gone from being the Fed whisperer and seer to being a surprised critic. Whoops.