I was laughing yesterday at this Bloomberg projection via the Daily Shot.
I am not sure where Bloomberg got that number from as CME Fedwatch had a 95% probability of a quarter-point hike.
Forget the outcome, either Bloomberg or CME was wrong on their percentages.
Dot Plot Fantasyland
For the rest of the year, FOMC members are roughly split between two more hikes and three more hikes. However, two participants think the Fed is done hiking.
Refreshing
Both Danielle DiMartino and John Hussman found Powell’s first press conference refreshing, DiMartino for the stock market, and Hussman because the Phillips Curve.
The third Tweet above is where the rubber meets the road. What happens if the stock market falters?
Lovey Dovey
Despite the lack of hawkishness, the equity markets closed lower.
Dow 15-Minute Chart
Gold
Dovefest
Gold had a very different reaction to the dovefest.
One day is meaningless, but if stocks stop going up on dovish Fed announcements, look out below for equities.
Mike “Mish” Shedlock
The hawkish meme has been overpowering but the markets today brought short term yields down a notch, or maybe it was just a sell everything day. Utes caught a bid, so it looks like maybe in a showdown with the market, the Fed blinked?
Anaemic growth based on massive printing, and ensuing bubbles would make everybody’s hand shake when pressing the forward button. These people are fumbling in the dark, and scared to death of every action they take.
“The third Tweet above is where the rubber meets the road.” Yup! The problem now is this can go on forever, with increasing amplitude, as you have said often. Powell is going to need a REAL Courage to act, not Bernanke’s Courage to act, which is basically throw money at everything and then strut off writing a book about it and a cushy job and leave someone else to clear the mess. I await ‘the emperor has no clothes’ moment. There is just no other way this emperor is going to get out of this corner with his clothes on. ECB and BoJ are also in the same spot.
“Gold had a very different reaction to the dovefest.”
I thought gold’s reaction was more of a result of the budget agreement – an agreement to spend more money.