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A Word On Jay Powell’s ‘Failure’ To Arrest The Stock Rally
Following his press conference on Wednesday afternoon, Jerome Powell caught some criticism from the peanut gallery for "stoking" risk sentiment that scarcely needed additional encouragement.
US equities scaled new highs as Powell spoke, prompting predictable catcalls which'll surely proliferate over the remainder of the week, particularly if asset prices build on gains.
Although I quickly (and aptly) described the Fed's March communications as "convoluted," it'd be disingenuous of me not to me
Good thought on how many of us harbor some Calvinist desire to punish investors for their exuberant silliness. As you said, that’s not the Fed’s job.
Nice further reflection on today’s Fed news. I will stick my chin out here a bit, as I think Powell has actually done a decent job over-all. Sure, the Fed could have reacted faster to cut rates once inflation really got going, but compared to the U.K., Germany, and even China–and also considering the war in Ukraine–I do not think we can fault the Fed for moving too cautiously either then or now. Recall, Covid was truly untested waters for everyone (as was the meme stock led, “everything rally” of 2021 that soon followed).
In complete agreement and arguably (as Mr H reminds us frequently) the Fed’s actions only have a minimal impact at the margins.
So after this near term euphoria in response to JPow, then what do we have to look forward to between now and December?
If one were wanting to convert electronics stock certificates to electronic USD’s sometime in 2024, it seems like now might be a good time.
For me, the “buy low” part of investing is intuitively easier than the “sell high” part.
If the market was orange juice, the Dukes would still be buying.