Brian Chappatta, Columnist

Jerome Powell Didn’t Say ‘Rate Cut,’ and That Matters

The Fed chair’s remarks weren’t as dovish as some might have initially thought.

June 4, 2019 at 3:15 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

“Act as appropriate” isn't much of a commitment.
Photographer: Mandel Ngan/AFP/Getty Images

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As the first headlines came in from Federal Reserve Chair Jerome Powell’s remarks on Tuesday, the bond market reaction was pure jubilation.

Two-year Treasury yields instantly sank almost 5 basis points, while benchmark 10-year notes reversed their earlier losses on hawkish comments from Chicago Fed President Charles Evans. The first take was seemingly that Powell signaled openness to cutting interest rates if needed because of heightened U.S. trade tensions with China and Mexico.