Jerome Powell Offered Markets a Reprieve. It Vanished in a Blink
- Stocks, bonds popped after Fed chair says rate hike unlikely
- Then the rally vanished as higher-for-longer reality dawned
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Traders on Wall Street cheered on Wednesday when Federal Reserve Chair Jerome Powell signaled he didn’t see oncoming interest-rate hikes despite inflationary pressures. The celebration didn’t last long.
For a brief period, US stocks popped to unleash the biggest post-policy meeting rally since December, while Treasury yields tumbled more than 10 basis points across maturities. The relief trade kicked in when Powell told reporters “it is unlikely that the next rate move will be a hike.”