Those Three Weeks Of Hysteria

Is three weeks a new record? That’s about how long Jay Powell’s performance bought him across most major markets. It was May 17, a Sunday night, when he appeared on 60 Minutes and, pardon me again, lied his a** off. One right after another, starting with the most obvious falsehood that his gang at the Federal Reserve “saw it coming.”

It’s hard to square that claim with one bungled measure after another, the central bank’s full “rescue” operation nowhere near what it was in early March by late March. If Powell saw it coming, then why didn’t they have everything ready to go in late February? Why not January? The FOMC still had its upper bound fed funds target set at 175 bps as late as March 2.

The Fed Chairman can’t have you remember it that way because, quite simply, risks abound. He needs you to believe that his institution performed splendidly, even to the point of saving the world yet again. If you buy that, then when confronted with the same negative case in the perhaps near future, maybe you won’t be as panicky this time around.

What most people took away from Powell’s 60 Minutes act, however, was the words “digital printing press.” Oh my, how that played over and over, the world abuzz about the first Fed Chairman who admitted to being kinda reckless about it (thanks, always, to M. Simmons for properly, beautifully doctoring the below screenshot). Flood of dollars and money, hell yeah!

Over the next several weeks, from May 18 (the Monday after) until June 5, even the bond market was drawn in by the puppet show drama. Yields at the always-troubling long end jumped, culminating in a noticeable spike up to June 5.

June 5, you might remember, was Payroll Friday; 

 The BLS had shocked the whole world even more than it was after being spun around by Powell, the government reporting a massive, record-sized gain in US payrolls where analysts had been expecting another historic loss.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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