Stocks, Bonds, Crypto Soar As Powell ‘Not Hawkish Enough’
Hawkish… but not hawkish enough…
He confirmed his message from the post-FOMC presser message that disinflation has barely begun and there’s still a long way to go.and that “financial conditions have tightened.”
He also reiterated that more rate hikes are likely to be needed.
And as we warned…
— zerohedge (@zerohedge) February 7, 2023
That means only one thing…
Stocks ripped…
But as stocks soared, Fed rate-trajectory expectations surged hawkishly…
Rate-hike expectations for March, May, and June are rising fast…
But, despite the hawkish shift in rate expectations, the dollar dived…
And bond yields tumbled…
Neil Dutta of Renaissance Macro Research, weighs in:
“The Fed is wedded to a stale outlook. That is dovish because it gives the current momentum in the economy more room to run. He had the opportunity to lean against what happened last week and he took a pass. Stock market investors get it.”
Powell continues to push the ‘disinflation’ narrative… and stocks love it (for now).
Tyler Durden
Tue, 02/07/2023 – 13:01
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