GaryWagner Fedpivot Powell Markets rallied after Powell's speech, but don't expect a Fed pivot - Gary Wagner
- Markets rallied after Federal Reserve Chairman Jerome Powell's speech on Wednesday, with the S&P 500 rising 3 percent, Bitcoin going up 2.7 percent, and gold jumping up by 1 percent. Powell said that the Fed would"moderate" the pace of rate hikes, language that market participants appear to inferred as dovish.
"[The Fed] will continue to have a very aggressive and tight monetary policy, but they will tone down the amount of each individual rate hike," he said."There was no mention of a pivot… [Powell] never mentioned that it would be appropriate to ease their monetary policy." "They heard what they wanted to hear, rather than the nuances in what [Powell] said," explained Wagner."He never talked about a pivot, he never talked about monetary easing, so there is not going to be that kind of scenario."The Bureau of Labor Statistics reported on Wednesday that U.S. job openings fell to 10.33 million in October, compared to 10.69 million in September. Unemployment has remained steady, and the quits rate has been steadily trending down since 2021.
"The Fed wants wages to keep pace with inflation," he said."That's the whole idea of having a maximum employment scenario, to have wages be enough to sustain those working-class citizens that need to pay their bills as goods and services costs have been rising."
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