Over the past decade, the #Fed (and other developed market central banks) have been the story to follow for those seeking to understand the direction of the #economy and #markets, but we think this might be changing now.
That is due to the fact that the stability of the #economy, of job markets, and of #inflation has driven the Fed’s notoriety down multiple notches, at least temporarily, now that the economy can in fact stand on its own and that interest #rates are at accommodative levels.
This morning’s #inflation data illustrated another example of this stability, with modestly firming price increases in many areas of the economy, few areas of real concern, and moderately higher levels of pricing power exhibited in some #service sectors.
Today’s #policy stance and Fed Chair Powell’s dovish comments should help keep the #economy and markets in a (hopefully) boring position, but that will still be spiced up regularly by elections, never-ending trade disputes, and the inevitable set of #geopolitical surprises.
The fact remains that the #Fed Chair made it clear today that #policy will continue to remain accommodative for quite some time, and the central bank is likely to refrain from hiking again until #inflation moves persistently higher.
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