When someone (Federal Chair Jerome Powell) tries to tell you something about themselves (more interest rate hikes), listen.
Oh dear. A lot of investors just learned again, the hard way, the old rule: When someone tries to tell you something about themselves, listen.
In the wake of the report, Wall Street just halved — repeat: halved — its prediction of an interest-rate cut this year. Thursday afternoon, money markets gave a 60% chance that rates would start to come down by the end of this year.Meanwhile the market has now dramatically raised the likelihood that the Fed will raise rates two more times this spring. Thursday, Wall Street figured Powell would be one and done: That he would raise rates on more time, by 0.
I spent Thursday emailing various very smart financial people to ask if somehow I had tuned in to a different Jerome Powell press conference to the one watched by the stock and bond markets, and they confessed they were as baffled as I was by the euphoric reaction.
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