Powell said what many of us have been thinking: There’s no reason to rush into a rate cut. The part he didn’t say (but implied) was that there was a clear risk to cutting rates at this time.
The market, which has been fueled for months by rate cut expectations, was quite disappointed. SPX shed 1.5% and closed at the bottom of the acceleration channel it’s been in since October. It was only a little bit scary.
Futures fell to slightly below our initial downside target before rebounding overnight on the usual algo nonsense.
Does yesterday’s action change the overall picture? Maybe.
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