As has been standard recently, each FOMC statement is really only a tweak to the prior one with most of the wording the same. It thus again makes what Powell says in the press conference the most important part of Fed day.
They altered the first paragraph comments on inflation to acknowledge the slowing recently seen to say simply “Inflation has eased somewhat but remains elevated.” This compares to saying it “remains elevated” and giving the reasons why. Also, for the past year they’ve been citing the Russian invasion as “contributing to upward pressure on inflation” but took that out as we know energy and food prices are at or below where they were before the war started.
Bottom line, Powell has been intent on making the FOMC statements as uneventful as possible and today was really no different with the slight changes stated in mentioning the inflation moderation but still “elevated” rate. I believe Powell in his presser will remain with his boot on the neck of inflation but we know he’s really no longer pressing down anymore outside of maybe one more time. But, he’ll also remind us that QT is its own form of tightening and that continues on at a rather aggressive pace. The Fed’s balance sheet though is STILL twice as large as it stood in January 2020 so they potentially have a long way to go, depending on if the bond market and the banking system can handle it which I’m skeptical it can.
Treasury yields are about where they were just prior to the statement release after an initial volatility move.
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.