Chart courtesy of FactSet via Wall Street Journal

"The System is Sound" 

Yesterday, in the Fed's FOMC statement Fed Chair Jerome Powell said "The U.S. banking system is sound and resilient."

"Sound and Resilient" is a repeat of his statement at the March FOMC meeting. 

If you have to keep repeating that message, what does that say?

KRE Regional Bank Index

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KRE Regional Bank Index courtesy off StockCharts.Com

FHN First Horizon 

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FNH First Horizon courtesy off StockCharts.Com

Shares of First Horizon are down a whopping 36 percent as of 10:20 Central. FNH cancelled its merger with Toronto-Dominion. TD is flat on the day.

Market Ignores Fed Chair Powell's Comments, Prices in More Interest Rate Cuts

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Earlier this morning I noted Market Ignores Fed Chair Powell's Comments, Prices in More Interest Rate Cuts

The red May 3 Post-FOMC bars reflect prices well after the market close yesterday with another check just after Midnight on May 4 that showed the same thing.

Press Conference Q&A

At the post FOMC press conference, Michael McKee of Bloomberg asked Fed Chair Jerome Powell "Are you ruling out the rate cuts that the market has prices in?"

Powell responded "We on the committee have a view that inflation is going to come down not so quickly. It will take some time. And in that world, if that forecast is broadly right, it would not be appropriate to cut rates and we won't cut rates. Markets from time to time have been pricing in quite rapid reductions in inflation. We factor that in but that's not our forecast."

Huge Volatility

Earlier this morning I noted a 13 percent chance of a cut in June on CME Fedwatch. 

That has now vanished to a 99 percent chance of a pause. 

Is the Worst Over?

At the FOMC press conference yesterday, Powell said he thought the worst was over.

The market does not seem to be convinced of nearly anything Powell says.

More By This Author:

Market Ignores Fed Chair Powell's Comments, Prices In More Interest Rate Cuts
Fed Says Banking System Is Sound And Resilient, Hikes Interest Rate A Quarter Point
An 86% Chance Of Fed Rate Hike Today And A 12% Chance Of A Cut In June