May 30, 2022 | Daily JAM, Morning Briefing |
Federal Reserve Governor Christopher Waller said today, May 30, that he wants to keep raising interest rates in half-percentage point steps until inflation is easing back toward the central bank’s goal of 2%. “I support tightening policy by another 50 basis points for several meetings,” he said. “In particular, I am not taking 50 basis-point hikes off the table until I see inflation coming down closer to our 2% target.” Waller is the first Fed official to speak on interest rate policy after last week’s rally and ahead of the quiet period that begins Saturday and runs through the Fed meeting on June 15. On Sunday I posted that the tenor of Fed comments this week would go a long way to demonstrating whether the Powell Put–the Fed’s de facto policy of propping up stocks on a decline–was still in effect or if it had been replaced by a policy of subtly encouraging orderly (of course) market retreats as an aid to fighting inflation.
May 29, 2022 | Daily JAM, Weekend JAM |
I’m looking for a test of the new “Fed Call” theory.
A few weeks ago, before last week’s rally anyway, the theory starting going around that the “Fed Put” (sometimes called the “Powell Put”) was dead. The Fed Put (in place since the days when it was called the “Greenspan Put”) held that investors and traders didn’t have to worry about the dangers of a big downside move in the stock market because the Federal Reserve would ride to the rescue, flooding the financial markets with cheap money, and rescuing stocks. The new thinking, however, was that with the Fed looking to contain potentially run-away inflation, the Fed would be happy to see stocks take a substantial but not dangerous tumble because that would act to damp sentiment and restrain spending. A decline in stock prices was, for this point of view, an ally of the Fed’s policy of increasing interest rates. The question is, of course, how active the Fed would be in “encouraging” a decline in stock prices
January 4, 2019 | Friday Trick or Trend |
Our regular (or occasional or perhaps occasionally regular) Friday series (actually running on Friday this week) Trick or Trend looks at what might (or might not) be emerging investible trends. Exclusively on JAM. This post won't run anywhere else. Ever. Today's big...
