Frustrating.<\/p>\n
That’s how I’d describe the Fed’s latest performance… and Fed Chair Jerome Powell has certainly made the Fed an easy target for angry investors.<\/p>\n
You see, there are two parts to “Fed Day.”<\/p>\n
The first part is at 2 p.m. ET – when the market finds out what the Fed’s interest rate decision is.<\/p>\n
Now, I’ll give the Fed some credit. Their 75-basis point hike was well telegraphed.<\/p>\n
The market has been expecting this interest rate hike for a while. If the interest rate increase was unexpected, then the action on Wednesday could’ve been worse.<\/p>\n
The Fed also releases their latest policy statement at the same time as their interest-rate decision.<\/p>\n
This allows investors to see what (if anything) has changed from the prior statement.<\/p>\n
The policy statement is crucial because it can give the market insights as to what the Fed is going to do next.<\/p>\n
The initial reaction to the new statement was quite positive and the market rallied sharply for a few minutes…<\/p>\n
That’s because the new statement said the Fed was considering the cumulative impact of its rate hikes to date.<\/p>\n
The market interpreted this to mean that the Fed would soon slow down the pace of future interest rate increases.<\/p>\n
But then… part two of the meeting began.<\/p>\n
At 2:30 p.m., Jerome Powell answered questions from the financial media… it’s typically where the fireworks will happen.<\/p>\n
A haphazard remark or a throwaway comment can wreak havoc on the markets.<\/p>\n
But what happened wasn’t so benign as a careless off-the-cuff comment.<\/p>\n
Instead, Powell pulled off the timeless bait-and-switch.<\/p>\n
| \n |
![\"Chart\"](\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202211\/20221107-jmu-01_xdf496.png\")
<\/div>\n![\"Chart\"](\"https:\/\/cdn.jeffclarktrader.com\/JMU\/images\/202211\/20221107-jmu-02_xdf496.png\")
<\/div>\n