Uh-oh. Dovish Talk from the Fed Lays an Egg

Stocks whoopee-cushioned (click on inset) on word from the Fed that tightening is unlikely for the remainder of the year. “Interest rate increases could be on hold indefinitely,” Powell said. “It may be some time before the outlook for jobs and inflation calls clearly for a change in policy.” Although the stock market’s obligatory headless-chicken dance ended with the broad averages largely unchanged, it’s surprising and not a little disappointing that shares didn’t get more lift from the announcement. Some observers had expected the central bank to feint toward tightening, however cryptically, and so Powell’s latest utterance should have produced a reaction of at least mild relief.

At the same time the Fed Chairman was deftly managing our expectations — the job for which he was hired — the news media was doing its part to spin some front-page headlines in Wall Street’s favor. A trade deal with China by “late April” was reported to be in the works, but this was just the administration’s way of softening expectations and bending our patience toward an increasingly uncertain time horizon. And lest Boeing continue to drag on stocks, the fatal propensity of the 737 Max to plummet to the ground was being ascribed to a mere onboard-computer glitch.  There’s nothing to see here, folks — just a few lines of bad code. Southwest, United and American have decided to keep flying the plane in any event, but we doubt that passengers would be so gutsy if they could choose their aircraft. A market solution would call for carriers to implement a $100 surcharge for travelers who’d rather avoid the 737 Max. My money is on Frontier to lead the way on this.

  • John Jay March 21, 2019, 9:10 am

    Situation Normal
    The rich get richer.
    The poor get Bernie, Beto, Kamala, and Gillebrand to choose from.
    Their platforms are melding into the same “All are welcome”, “Tear down that wall”, and, “Here, fill out this form to see how much you owe in Reparations.”
    Twelve States are trying to circumvent the Electoral College, Al Gore is back making Global Warming speeches, and SOH Pelosi wants to give 16 year olds and illegal aliens the right to vote.
    Doom approaches for our Republic

  • none March 21, 2019, 8:54 am

    Arnold Schwarzenegger
    Donald Trump
    John McCain

    Just unreal.

    The DXY and EC markets have move from a 20 trading day high/low, to the reverse 20 trading day low/high.

    Confirming both Bull Trap (DXY) and EC Bear Trap.

    This inflection point towards ‘real value’ of the above 3 persons are all part of the ongoing, ‘same’.

    No real change in sight, and on we go!.

    Have a great day Rick.