A Disappointing Press Conference

Stocks moved sharply lower on the disappointing forward guidance, which suggested “one and done”, and then recovered a bit when Powell clarified his remarks. It’s sort of surreal when reporters ask Powell to comment on the fact that hundreds of billions in wealth is being destroyed as he speaks, indeed because he speaks.

I was disappointed in the general thrust of questions from reporters. The markets clearly believe the move was too little, but most of the questioners seemed skeptical of the need for any move at all.

One reporter suggested that this move gave the Fed less room to cut rates in a future recession, which is nonsense. To his credit, Powell rejected the “premise” of her question, pointing out that the purpose of the move is to strengthen the economy, and thus give them more room to cuts rates in a future recession.

I would cut Powell a bit of slack, as I believe his remarks were probably somewhat constrained by splits on the FOMC committee. Overall it was a miss, but not a major one.