Powell continues to be the prudent, independent financial regulator he was hired to be.
Compared to the gyrations we saw last fall, 350 points is nothing to be concerned about.
The markets have been on a tear for a few months, setting records. Some Over-optimistic investors had been expecting rate cuts to start in March (Powell never forecast that AFAIK), and so they had a mini (1%) tantrum when those hopes were dashed by the better than expected jobs report released on Friday.
Powell isn’t responding to “Trump’s threats” (whatever you imagined those to be), or anything else but the numbers, especially inflation. If he cuts rates too soon/too much, inflation could heat up again, just in time for the election, and we don’t want that, do we?
I’ll take a hot jobs market over lower interest rates any day, especially when rates are at or below historic averages.
Here’s some reality based reporting from CNN:
ARTICLE
“Those comments along with his statement on Wednesday … suggest that as long as inflation data comes in as it has been or better, the Fed will be cutting rates by the summer,” wrote Bespoke Investment Group analysts in a note on Monday.
Summer has been the consistent projection for cuts to begin that I have seen.
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