From Chair Powell “I don’t see the stag nor the flation”
Fed FOMC meeting: Mixed bag, with wild gyrations in the S&P 500, which at one point during J Powell’s Q&A jumped to an intraday high of 5,096 from the low of 5,013.
The tenor though didn’t seem overly hawkish, instead, it seemed more cautious – clearly, they have a lot of work to do ahead and can’t take any chances either – a very fine tightrope to walk, Powell wants to stick to his dual mandate of keeping employment strong and inflation under control. He kept talking about balances – a difficult task, indeed,
The big positive seemed to be the reduction in quantitative tightening to $25Bn from $60Bn. The markets were expecting $30Bn
The Federal Open Market Committee did decide to ease its quantitative tightening by slowing the pace of its balance sheet runoff. The FOMC will reduce the monthly redemption cap on Treasury securities from $60B billion to $25B.
Let’s wait for the Friday payroll report.