Thread by @RajeevthePawar

A much better performance from Powell. But his tone and body language clearly showed that he believed that the US economy is doing well and this is just an insurance cut against the Trump Trade War and global weakness
#Powell #FOMC #ratecut #Trump #Fed /1 @threadreaderapp

Powell was clear the US will not go to negative rates. He believes that asset purchases and forward guidance have worked in the past and that is the way forward as well.
#Powell #FOMC #ratecut #Trump #Fed /2

On yield curve inversion Powell does not see it as a recession indicator but rather a contraction in term premia driven by global low interest rates.
#Powell #FOMC #ratecut #Trump #Fed /3

Clearly the Fed has no clue on where rates would be a year from now. Powell said as much. He sort of discounted the dot plot saying all action would be data driven.
#Powell #FOMC #ratecut #Trump #Fed /4

Good to see Powell maintain the stature and dignity of the Fed by refusing to react to Trump’s comments. Respect.
#Powell #FOMC #ratecut #Trump #Fed /5

Powell highlighted the limitations of monetary policy and stressed that it is only fiscal policy that can support sustainable growth.
#Powell #FOMC #ratecut #Trump #Fed /6

On bond supply impacting money markets Powell was clear that issuance is the domain of the Treasury.
#Powell #FOMC #ratecut #Trump #Fed /7

On #moneymarkets Powell made it clear that he does not favour frequent #OMOs and prefers a sustainable reserve build up. Admitted that while they knew of the flows the extreme money market caught them by surprise.
#Powell #FOMC #ratecut #Trump #Fed /8

Overall it’s a confused and undecided FOMC. Markets clearly see that. 10 yr has given up its gains while 2 yr yields are almost 5 bps higher. #Powell #FOMC #ratecut #Trump #Fed /9

The dotty plot! /10

#Powell #FOMC #ratecut #Trump #Fed

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