Talking Softly Without Carrying a Big Enough Hawk
In Powell, markets saw a Freudian “tell” that suggested dovishness — or maybe they just heard what they wanted to hear. Either way, the Fed lost the day.
Deconstructed by the markets.
Photographer: Al Drago/BloombergTo get John Authers’ newsletter delivered directly to your inbox, sign up here.
On days like these, it’s easy for those of us trying to analyze markets and the economy to slip into the realms of something more like intense literary criticism, or even psychoanalysis. The Federal Reserve announced that it was raising its target rate by 25 basis points, hiking for the eighth meeting in succession. Markets briefly wobbled on the news; and then Chair Jerome Powell embarked on his press conference, traders released their inner Sigmund Freuds and Jacques Derridas, and risk assets headed for the moon.