“One and done”?
The Fed statement was a hawkish pause – signaling “some additional policy firming may be appropriate” as opposed to “some additional policy easing may be appropriate.”
Can Fed Chair Powell walk the high-wire again – justifying a ‘pause’ with inflation so high and unemployment so low without spreading fear about the banking system crisis being worse than we know (remember they have seen the latest SLOOS data).
Bear in mind that the market is now massively (and dovishly) divergent from The Fed‘s dot-plots for the end of this year and next year… How will Powell explain that ‘higher for longer’ compared to the market’s belief that cuts are coming fast and many…
“The chair will have his work cut out for him because when the chair will say ‘pause,’ the markets may hear ‘done.’ And if he says it again, they may hear ‘rate cuts,’” Richard Clarida, who served as Fed vice chair from 2018 until January 2022, said on Tuesday.
Watch Powell explain why the market’s wrong live here (due to start at 1430ET):
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https://www.zerohedge.com/markets/watch-live-fed-chair-powell-attempt-pitch-dovish-hike
