The Fed staged its every-six-week meeting this week, with the press conference happening at 2:30 PM on Wednesday. Did anything exciting happen? Let’s go take a peek at Wolf’s site. He’s deconstructed Powell’s remarks plus the Fed Statement released at 2:00 PM that same day.
Yields Spike, Stock Dump, Futures Fall
Powell explained that “monetary policy will become significantly less accommodative,” that the Fed would “move over time to a policy that is not accommodative,” and that high inflation readings would have important implications for the path of the rate hikes.
“A significant threat to the labor market is high inflation,” he said. A long recovery, such as the last recovery which was the longest on record, requires low inflation, he said, thereby turning over the argument that the Fed couldn’t tighten because it would threaten the labor market.
The Fed has a lot of room to raise interest rates without damaging the labor market, he said.
“The Committee is of the mind to raise the federal funds rate at the March meeting,” he said. That means March 16 for liftoff.
And the balance sheet reduction would begin “sometime later this year, perhaps, we haven’t made a decision yet,” he said.
Rates are going up. And not just a little. And money printing will stop, shortly.
by davefairtex 
