Doug Noland: No Mystery
“Chairman Powell appeared somewhat downtrodden during his Wednesday press conference, a notable shift from his confident demeanor in December. We can assume Powell and other Fed officials have been alarmed by how swiftly booming securities markets succumb to instability and illiquidity. I believe Powell wanted to see markets begin standing on their own; that, in contrast to his three most-recent predecessors, he would be in no rush to come to the markets’ defense. He was content to see overheated markets commence the cooling process. A correction would actually be constructive for system stability. The predicament: Overinflated Bubbles don’t calmly deflate. Circumstances forced the Fed’s hand.”
USAGOLD note: Noland offers an insightful take on the Fed’s monetary policy pivot announced this past Wednesday.
Repost from 2/5/2019