Fed Meetings = Horoscopes for Finance Bros

TL;DR

• Hours of labor go into studying Fed chair Jerome Powell’s phrases, studying his moods, and distilling all of it right into a ‘normal vibe’ that influences trillions of {dollars} of worldwide investments.

• The market cherished Jerome’s plans for the long run – as a result of markets love certainty – and over the previous yr, we have been starved of it.

• The financial system is not out of the woods but, however this can be a good signal.

Full Story

Federal Reserve assembly transcripts are like Horoscopes for finance bros.

(Inform us we’re improper – we dare you!)

Hours of labor go into studying Fed chair Jerome Powell’s phrases, studying his moods, and distilling all of it right into a ‘normal vibe’ that influences trillions of {dollars} of worldwide investments.

It is bizarre.

And whereas we touched on the Fed’s newest assembly yesterday, there’s extra to cowl!

As a result of this time was completely different. This time, there was no crystal ball wanted to divine J-Powell’s plans for the long run (and that is a rarity).

On prime of saying that he will not be rising charges this month, JP additionally stated:

• The Fed would not have to see a recession with the intention to minimize rates of interest.

  (Which is superior, trigger many had assumed his plan was to defeat inflation, by forcing a recession).

• Additional price hikes are ‘not going’.

  Everybody had type of assumed that, however JP had by no means outright stated it – in actual fact he’d truly threatened extra hikes.

• Price cuts will likely be a subject of debate going ahead.

  The Fed is outwardly planning to chop charges by .75% in 2024!

The market loooooved all of that – as a result of markets love certainty – and over the previous yr, we have been starved of it.

The financial system is not out of the woods but, however this can be a good signal.