The Great Post-Election Rally Hits a Wall as Powell Weighs In
- Rate angst sparks worst weekly pan-asset selloff in 13 months
- Citi says market action showing investors feel ‘exhausted’
Jerome Powell speaks during a conversation on the economic outlook at Music Hall at Fair Park in Dallas, Texas, on Nov. 14.
Photographer: Shelby Tauber/BloombergAfter a post-election risk-taking binge, stock investors sobered up this week as Jerome Powell’s go-slow message on interest-rate cuts cooled the Trump trade euphoria that drove Wall Street to records.
With the world’s most important central banker in no hurry to ease monetary policy thanks to a still-robust labor market and strong economic data, bond yields once again rose and dragged stocks lower in their wake. Down 2% over five sessions, the S&P 500 erased half of its trough-to-peak gains since the election. Combined with losses in corporate credit and commodities, the week rounded out a pan-asset retreat that by one measure was the worst in 13 months.