Instant Reaction: Jay Powell on the Fed Decision

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Bloomberg Talks 28 min 7 chapters transcribed 3 months ago
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The chairman of the Federal Reserve, if there was a good meeting to scrap the forecast, then this one was probably it. The chairman de-emphasizing the projections, re-emphasizing the uncertainty, focused on the shock in the Middle East. We had one question. How would they respond to it? Would they look through it? The answer, it's not possible. that simple equities in response negative this session lows right now down one percent on the s&p 500 likewise on the nasdaq in the bond market twos tens and thirties yields higher particularly at the front end of the yield curve up by seven basis points on a two-year 375 if you like me thought this would be boring this was not a snooze the federal reserve chair asked about succession take a listen to what he had to say
If my successor is not confirmed by the end of my term as chair, I would serve as chair pro tem until he is confirmed. I have no intention of leaving the board until the investigation is well and truly over with transparency and finality. On the question of whether I will then continue to serve as a governor after my term ends and after the investigation is over, I have not made that decision yet. Three points from the chairman of the Federal Reserve. Let's go through them individually. Point one, I will stay on as chair until a successor is confirmed. Point two, I have no intention of leaving the Fed while the DOJ investigation is ongoing. And point three, even after that is complete, I haven't made a decision on how long I'll stay on.
A big headline in that news conference. He actually engaged with the question. We all were wondering whether he would give some sort of clarity, and we've got it. He is going to be the Fed chair until Kevin Warsh is in the seat. There's this question of what is well and truly over in terms of the investigation actually mean. A lot of people are going to be wondering that. And the fact that he hasn't made a decision yet, what is going to tip the scales for him to understand when he can make the decision? Either way, this wasn't a boring news conference in any way, shape, or form. If we can bring up just an intraday chart, the front end of the yield curve. So bring up the two year intraday and just have a look where things started to pick up.
The Fed chair throughout this news conference was leaning into anchoring inflation expectations. That was notable. But we started to really bounce out to session highs when he started to lean into that question about his future. And I just wonder, Bremmer, we can have that conversation with guests over the next 15 minutes or so, whether those two things are connected to some extent.

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