In the immortal words of Marty Zweig, “Don’t Fight the Fed”.
And the markets didn’t, which is why oil, lumber, interest rates and stocks all cratered to Powell’s tin-eared comment that further tightening in 2019 was on “automatic pilot”.
But today, it’s a different tune.
You have no idea how glad I am that he listened. Commodity prices are climbing (relieving the pressure that might come about because of extreme deflation) and long-term rates are climbing (reducing the likelihood of an inverted yield curve).
