Markets were all relatively behaving themselves up to Fed Chair Powell's presser. The statement was shrugged off as a nothingburger but as Powell began speaking - beginning with a focus on inflation - he flipped and offered the junkie-market just the fix it needed: "likely appropriate to slow increases at some point" and any further increases will be "data dependent."
Hawkish statement... Dovish presser.
Finally, Powell said "he doesn't see US in recession", and - toeing the Biden admin line - proclaimed, that he takes the first estimate for Q2 GDP (due tomorrow) "with a grain of salt."
What that translates to is simple...
Bad news is officially great news again.
— zerohedge (@zerohedge) July 27, 2022
A big miss on Friday = limit up
Powell's words sent rate-hike expectations tumbling dovishly...
Source: Bloomberg
And the markets all went full 'Leeroy Jenkins' after that...
The largest buy program since March 2021 rolled through stocks as Fed Chair Jerome Powell said it will probably be appropriate to slow the pace of rate hikes at some point.
Source: Bloomberg
Stocks were already higher ahead of the Powell promises but exploded higher afterwards:
As a reminder, the Nasdaq 100 has been insanely bullish on recent Fed days:
-
Today: +4.3%
-
June 15: +2.49%
-
May 4: +3.41%
-
March 16: +3.7%
Gold shot higher on the dovish talk...
Cryptos exploded to the upside with Bitcoin approaching $23,000...
Source: Bloomberg
And bond yields plunged at the short-end...
Source: Bloomberg
The longer-end of the curve underperformed the short-end (30Y +3bps, 2Y -8bps)...
Source: Bloomberg
...sending the yield curve significantly steeper (2s30s un-inverted)...
Source: Bloomberg
On the other side of the scale, the dollar was clubbed like a baby seal...
Source: Bloomberg
Oil prices were notably higher today with WTI back at $98, erasing yesterday's losses...
US NatGas prices fell today...
Finally, we note just how massively dovishly divergent the market is from The Fed's Dot-Plot...
Source: Bloomberg
Will The Fed really pivot that hard from its inflation-fighting stance?
Markets were all relatively behaving themselves up to Fed Chair Powell’s presser. The statement was shrugged off as a nothingburger but as Powell began speaking – beginning with a focus on inflation – he flipped and offered the junkie-market just the fix it needed: “likely appropriate to slow increases at some point” and any further increases will be “data dependent.”
Hawkish statement… Dovish presser.
Finally, Powell said “he doesn’t see US in recession”, and – toeing the Biden admin line – proclaimed, that he takes the first estimate for Q2 GDP (due tomorrow) “with a grain of salt.”
What that translates to is simple…
Bad news is officially great news again.
A big miss on Friday = limit up
— zerohedge (@zerohedge) July 27, 2022
Powell’s words sent rate-hike expectations tumbling dovishly…
Source: Bloomberg
And the markets all went full ‘Leeroy Jenkins’ after that…
[embedded content]
The largest buy program since March 2021 rolled through stocks as Fed Chair Jerome Powell said it will probably be appropriate to slow the pace of rate hikes at some point.
Source: Bloomberg
Stocks were already higher ahead of the Powell promises but exploded higher afterwards:
As a reminder, the Nasdaq 100 has been insanely bullish on recent Fed days:
-
Today: +4.3%
-
June 15: +2.49%
-
May 4: +3.41%
-
March 16: +3.7%
There’s just one thing… the market gave it all back the next day…
Gold shot higher on the dovish talk…
Cryptos exploded to the upside with Bitcoin approaching $23,000…
Source: Bloomberg
And bond yields plunged at the short-end…
Source: Bloomberg
The longer-end of the curve underperformed the short-end (30Y +3bps, 2Y -8bps)…
Source: Bloomberg
…sending the yield curve significantly steeper (2s30s un-inverted)…
Source: Bloomberg
On the other side of the scale, the dollar was clubbed like a baby seal…
Source: Bloomberg
Oil prices were notably higher today with WTI back at $98, erasing yesterday’s losses…
US NatGas prices fell today…
Finally, we note just how massively dovishly divergent the market is from The Fed’s Dot-Plot…
Source: Bloomberg
Will The Fed really pivot that hard from its inflation-fighting stance?
