Given today’s dovish surge in March rate-cut odds (and 2024 rate-cut expectations) after NYCB’s results, one can’t help but think Powell will use the press conference to push back further against the market’s attitude, building on the very hawkish Fed statement.
At a minimum, The Fed wants to maintain some optionality into the next two meetings and not suggest he is being bullied by the market itself.
Of course, today’s shitshow at NYCB will likely be mentioned (and an imminent start to tapering QT) as we note that The Fed removed the following sentence from the statement:
“The U.S. banking system is sound and resilient”
So, once again, Powell will be walking the tight-rope – this time as the hawkish-dove.
It would be a huge mistake if he inched back from the hawkish statement in some way after all the jawboning…
Watch live (due to start at 1430ET):
Tyler Durden
Wed, 01/31/2024 – 14:25
