The comparison to the ex-Fed chief, who burnished his inflation-fighting bonafides by hiking rates aggressively, might be a bit of self-indulgent hyperbole. Former Fed Chair Alan Greenspan was also an inflation hawk, but was often inveighed by the rise of the Omicron variant of COVID 19, and surprised Wall Street by embracing his inner inflation fighter. By warning that the Fed could curtail its policy at a faster pace and dramatically retiring the dreaded transitory word to describe inflation, Powell hewed a line that betrayed the central bank's growing concerns about skyrocketing prices.
While most Wall Street expects that the first rate hike in over two years will happen by June, the Fed Chair s comments suggest that the central bank may surprise by pulling the trigger earlier, at least in theory.
Even bonds, benefiting from safe-haven buying that's driving down yields, have signaled a tempering of Fed expectations, with the chairman acknowledging inflation catching market observers off guard.
Given the consistency of the message about tapering coming from the Fed in recent weeks, it now looks like it will take a deterioration in the public health situation over the next two weeks to prevent the FOMC from deciding to speed up the pace of tapering at the next meeting, according to JPMorgan Chase economist Michael Feroli.
He noted that Powell's question and answer remarks were a fair bit more hawkish than the prepared testimony released the day before. Powell did not give a nod to the risks posed by Omicron, which has made investors jumpier than usual in the wake of Friday's stunning sell-off.
According to Tradeweb data, interest rates on 10 year TNF and 30 year Treasuries TNX have dropped precipitously from last week's highs and are on track for a monthly drop. Surprisingly, the 5 year yield soared to the highest close since February 2020 last week, but is now on track to end the month lower than where it started.
Andy Kapyrin is the co-head of investments at the moment, and bonds are caught between two very powerful forces. The path of least resistance is higher. In the face of volatility, Treasuries will always have a bid. Let s not get started on oil prices CL F which are now dangling near bear market territory below $67, after a run to near $85 per barrel earlier this fall. According to Brad McMillan, chief investment officer for Commonwealth Financial Network, the latest COVID mutation could have unexpected effects that support the economy and the markets. The energy prices are down, which should help to pull inflation down. He stated that with less inflation likely and worries about the recovery, the Fed may pause in tightening monetary policy, which seems to be showing up in markets as interest rates have pulled back in recent days. The economic damage Omicron does will be offset by the ease of policy and lower rates. All of that suggests Powell's newfound hawk could easily run headlong into the black swan Omicron poses. The editor at Yahoo Finance, Javier E. David. ET: MBA Mortgage Applications, November 26.1.8% during the prior week. None 8:15 a.m. ET: Markit U.S. Manufacturing PMI, November final 59.1 during the previous month, None 10: 00 a.m. ET: Construction spending, month-over-month, October 0.5% expected, September - 0.5% - None 10: 00 a.m. ET: ISM Manufacturing, November 61.0 expected, 60.8 in October None 4: 15 p.m. PVH Corp. PVH is expected to report adjusted earnings of $2.07 per share on revenue of $2.41 billion.
Treasury secretary Janet Yellen and Federal Reserve Chair Jerome Powell do not have a second day of congressional hearings ahead of them. They will testify before Rep. Maxine Waters and the House Financial Services Committee beginning at 10 a.m. None A second big congressional hearing will begin at 10: 30 a.m. The interview will feature Facebook FB whistleblower Frances Haugen. The former employee is expected to target the social media giant's business practices.
No over at the White House at 12: 35 p.m. President Biden will deliver a speech on supply chain issues and his administration's response to ensure shelves are well-stocked this holiday season. Cathie Woods Ark loads up on Twitter as stock hits 12 month low Bloomberg Former consumer watchdog Richard Cordray is in mix for top regulatory role at Fed: Sen. Brown.
NFTs go mainstream at Art Basel: A better way to transfer digital ownership.