Back in early October, news-reading algorithms, followed by traders and investors, reacted to Federal Reserve Chairman Jerome Powell’s statement that our central bank was “a long way” from getting rates to a neutral zone, which is the area in which interest rates are neither slowing the economy nor boosting growth. The subsequent market sell-off erased the S&P 500’s gains for the year, taking stocks down over 10 percent from their new highs hit in late September.
Going into Powell’s scheduled speech on Wednesday at the Economic Club of New York, President Donald Trump took a swipe at his Fed chairman, saying in an interview with the Washington Post, “I’m not even a little bit happy with my selection of Jay (Powell).”
The talk on the street Tuesday night was that this statement all but took a dovish tease off the table, as Fed watchers felt Powell would bristle rather than acquiesce.
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