Monetary policy is more about 'judgement' than it is about 'precision', and that was pretty evident when summarizing Jerome Powell's brief Friday talk, which errerd on the side of slaying the inflation dragon (as Dick Fisher likes to call it... former Dallas Fed Pres.). The market navigated this adequately and I called for an afternoon rally and we got that; with some pre-weekend fading.

If we get through the weekend without much drama, any early setback should be absorbed, and S&P will strive to again challenge the 50-DMA before new risks. By no means do I see the market out of the woods seasonally as of yet.

The stronger or more resilient (a better way to describe the) economy is good news, not troubling, even as the Fed Chairman bemoans not having weaker labor and Housing markets. (Jobs news is next week's big market focus).

So Chairman Powell can argue navigating under the stars (he said that) has done a good job getting us here ... actually they stumbled through it unless it was the Government's intention to debase our currency and repay Debt with 'depreciated Greenbacks'.

Personally I will never forget his repeated 'inflation is transitory' argument. I suppose now excessive hawkishness is also 'transitory'; it's data dependency.

It was the 'transitory' gaffe that formed the basis of overstaying low rates for too long, and the beginning of my saying I'm mad at the Fed (not fighting them), because they assured longer duration of eventually higher rates (here we are) and more struggling and even demoralizing suffering for a majority of citizens; because of their myopia about inflation being 'transitory' two years ago.

Yes we're back to a so-called 'decent' rate structure and the Fed will slow or in my wishes, stop, the rate hikes. But the harm they've done by institutionalizing higher wages (just look at the tentative UAW/Teamsters/UPS deals etc.) likely means price levels for the poorer, or those on fixed incomes, become more of a challenge or stays high for longer, while the Fed extols virtues of working for 'the people', when the results work against the people and prohibit millennials finding affordable Housing and fair mortgages (basically in most desired areas with decent jobs, schools, and lower crime .. the segments ever-narrowing).

In sum (should I rename the summary 'Market X-ray?): we muddled through the Chairman's speech about as he did; without dramatic decision direction or conclusion. In ways that makes sense; believing data-dependency was going to be the outcome before any of this; and knowing he'd take a middle-ground.

Got our intraday rally; and the 50-Day looms again as resistance for the S&P. We continue to believe Fed-talk might be more bluster by the hawkish among the Fed, as rhetoric continues; but the Fed's aware they can 'do damage' if they're not treading very light from this point on. I think they quietly know so.

My view remains that 'fiscal policy' has contributed to the inflation these past two+ years, and the Federal Reserve responded by fueling the move with too easy rates for so long; and then morphed into driving prices higher by starving the credit markets of 'affordable' interest rates for the majority of society.

This stubbornness essentially was and is a lag in response, in both directions, and it's amazing that the economy has been relatively resilient considering all. However I concur that rates will be high (not necessarily higher) or longer; as it is a brutal trend by the Fed to 'sober-up' and get financial religion; because there never was justification once Covid was on the wane to keep money that easy. We should be at peak rates; probably now.

Market 'X-ray: S&P and most stocks muddled through Jackson Hole to then rally as I suspected on the morning X (tweet) and midday video. Late fading was mostly in big stocks that were overdone like Nvidia, while other held well.

There are zombies to deal with as the year progresses; particularly deficiency or default issues (mostly commercial property but more); and Oil price impact too. A key inflation issue might relate to Turkey working with Ukraine on ways to ship grain out of the Black Sea without resorting to alternative routes. They are having a meeting on that today to bypass more Russian efforts to thwart food deliveries. We're not going to see low prices; but ideally not much higher.

Enjoy the weekend! Stay safe and cool; it's hellish and stormy in many places.

More By This Author:

Market Briefing For Thursday, Aug. 24
Market Briefing For Wednesday, Aug. 23
Market Briefing For Tuesday, Aug. 22