Key point the market has been very slow to grasp:
POWELL: WE FULLY APPRECIATE THIS IS A DIFFERENT SITUATION THAN THE LAST TIME FED RAISED RATES
— ʎllǝuuop ʇuǝɹq (@donnelly_brent) January 26, 2022
*The Fed via Powell has effectively confirmed they will tighten ‘gradually’ – and into a slowdown
2021 was a year of noise + higher prices w/ supply side issues
Fed tightening will only be the needle that pricks the asset bubble
— Adem Tumerkan (@RadicalAdem) January 26, 2022
"He is saying that phrase that got him into so much trouble before which is that 'The balance sheet shrinking would be like watching paint dry.' That is what markets really do not like."#Powell#Fed#DiMartinoBoothhttps://t.co/8ngVsO1Nnx
— Danielle DiMartino Booth (@DiMartinoBooth) January 26, 2022
Powell chose the hard path: he has an hawkish answer for every question asked.
Last time this happened was in late 2018.My base case is for the 5-30 yield curve slope to invert and for risk assets to keep challenging Powell's stance.
— Alf (@MacroAlf) January 26, 2022
Powell didn’t talk gradualism, “nor did he rule out a 50 [bp] move, although we would judge the latter to be very unlikely .. This is still a Fed that does not want to surprise .. but we get the sense the Fed is more concerned about inflation than it was last year.” – Brean Econ
— Carl Quintanilla (@carlquintanilla) January 26, 2022
Six sigma is the new standard deviation… https://t.co/ldNPVHgJXq
— Peter Atwater (@Peter_Atwater) January 26, 2022
Inflation Is The Kryptonite That Will End Our Decades-Long Monetary Policy Ponzi Scheme https://t.co/GIDTl26VD3
— Quoth the Raven (@QTRResearch) January 26, 2022
"Either they choose to uphold their commitment to their constituents or they side with the Fed holding up its commitment to the big banks and big investors. To me the conflict is pretty clear. Politicians and the fed tend to go the same way."https://t.co/eHfL1HKkzE
— Danielle DiMartino Booth (@DiMartinoBooth) January 26, 2022
Consumers balk at higher retail prices https://t.co/OA1GlHSPJM
— Asia Times (@asiatimesonline) January 27, 2022