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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 ‘common vibe’ that influences trillions of {dollars} of world investments.
The market cherished Jerome’s plans for the longer term – as a result of markets love certainty – and over the previous 12 months, we have been starved of it.
The economic 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 fallacious – 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 ‘common vibe’ that influences trillions of {dollars} of world 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 longer term (and that is a rarity).
On prime of saying that he will not be growing charges this month, JP additionally mentioned:
The Fed does not must see a recession so as to reduce rates of interest.
(Which is superior, trigger many had assumed his plan was to defeat inflation, by forcing a recession).
Additional price hikes are ‘unlikely’.
Everybody had type of assumed that, however JP had by no means outright mentioned it – in reality he’d really threatened extra hikes.
Fee cuts will likely be a subject of dialogue 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 12 months, we have been starved of it.
The economic system is not out of the woods but, however this can be a good signal.
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