May 2, 2019 Upon Further Review-Markets Still Not Happy With Jerome by Lester Murray
Despite having a night to "sleep on it", markets still don't like what the Fed didn't do and what Chairman Powell didn't say. While investors may not have been expecting a rate cut at this week's FOMC meeting, they wanted to hear the Chairman voice a little more concern about the current state of economic disinflation. Instead, he views the declining rate of inflation as transitory, not unlike Janet Yellen's view during her term. How long is something transitory until it's not? His mostly upbeat description of our economic state and lack of concern about core disinflation was not music to the ears of investors looking for him to hint at a future rate cut. He gave no such hints, instead describing policy as lacking a bias one way or the other. The Ten-Year is off about a quarter-point so far, and that has pushed the yield up to around 2.54% after things closed out yesterday around 2 1/2%. He again recognized the tightness of labor conditions which look a little less tight after this morning's report from Challenger, Gray, and Christmas that Job Cuts rose 10.9% last month on a year-over-year basis. That's up from 0.4% in March.
Posted on Thu, May 2, 2019
by Lester Murray