Powell is leaving markets dazed and confused

BloombergOpinion/John Authers/1-31-2022

“It’s understandable that the market would take a while to adjust to a new rising-rate reality. But by the week’s end, many were complaining that the turbulence was driven not by the Fed’s new determination to raise rates quickly, but by the sheer uncertainty that the central bank, and Powell in particular, is predicting. He spoke repeatedly of the need to be “nimble” — a nice way of saying that the Fed might have to change its mind and its direction and make things up as it goes along.”

USAGOLD note: In last Thursday’s Afternoon Update we characterized the markets as “confused” by Jerome Powell’s posturing following the Fed’s most recent policy meeting. Bloomberg’s Authers agrees and posts supporting assessments from a number of Wall Street stalwarts in his latest column. After citing the uncertainty generated by the Fed’s “dramatic pivot” in addition to the uncertainties surrounding inflation, omicron and a possible Russian invasion of Ukraine, London’s Absolute Strategy Research says “forecasting markets looks increasingly like buying a lottery ticket.”