Who to Believe? Jerome Powell or the Markets? By Tim Smart (US News) / Dec 4, 2023
Markets are calling the Federal Reserve Chairman’s bluff. This week’s readings on the labor market could change that.
Last Friday provided a split-screen view of the markets and the Federal Reserve.
Fed Chairman Jerome Powell sought to tamp down some of the exuberance among investors that the central bank is done with raising interest rates and will begin cutting them next year, telling an audience at Spelman College that “it would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease.”
The markets responded with a shrug and promptly pushed the S&P 500 index to a new 2023 high.
“Investors are increasingly pricing in the start of interest rate cuts in the coming year, while the Fed is lightly pushing back on this view in fear of financial conditions easing too rapidly, as Chair Powell remarked on Friday,” William Blair macro analyst Richard de Chazal wrote in his weekly market note on Monday.
CONTINUE > https://www.usnews.com/news/economy/articles/2023-12-04/who-to-believe-jerome-powell-or-the-markets
