What I found most interesting of Powell’s press conference so far was his comment that he wasn’t afraid of over tightening because they can always ease thereafter (use our tools) if they do over do it. So bottom line here, with Powell trying to balance the acknowledgement that they will be more sensitive to the impact of what they’ve already done while not wanting too sound dovish, he is reminding us that the destination of the fed funds rate will still be what it will be regardless now of the pace in which they get there. And when they get there, assuming they haven’t over did it, rates sill stay there for a period of time until inflation falls notably.
The 2 yr yield is now above where it was right before the statement at 4.57% and the 10 yr at 4.06% is 4 bps above.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.