Powell: “The time has come ... “

hank

Looks like investors are about to get what they’ve been wishing for. Sure to move markets, but not necessarily in the ways expected. / Live Updates Jerome Powell at Jackson Hole.

From the WSJ : “We do not seek or welcome further cooling in labor market conditions,” Powell said in a speech at the central bank’s annual gathering in the Grand Teton National Park on Friday. “The time has come for policy to adjust.”

From Lewis Carroll’s ”The Walrus And The Carpenter” (poem)

"The time has come," the Walrus said,
"To talk of many things:
Of shoes—and ships—and sealing-wax—
Of cabbages—and kings—
And why the sea is boiling hot—
And whether pigs have wings."

yogibearbull

He emphasized inflation "expectations" several times - it's monitoring or anchoring.

I see 2 common quantitative measures for "expectations":

1. Inflation-"expectation" = Nominal Treasury yield - TIPS yield.
FRED has data for 1, 2, 5, 10, 20+ years; chart below is for 5 years.
https://fred.stlouisfed.org/graph/?g=1t0dr

2. Fed fund futures rate "expectations" that are based on trader's expectations as indicated by futures quoted around future FOMC Meetings. In the link below, click on Probabilities on the side panel.
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

Then there are lots of opinions floating around - I don't pay much attention to those.

BaluBalu

Thanks. Yogi.

Powell speech moved 50 bps cut from 24% to 36% probability; enough for today's equity mood!

Baseball_Fan

With stocks, housing, rent, food at or near all time highs...spending a trillion every 3 or 4 months....

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