MBS RECAP: Stocks and Bonds Cheer Dovish Powell

Posted To: MBS CommentaryIf you knew what to look for, today’s comments from Fed Chair Powell erred on the side of dovishness–that is, they were rate-friendly. They were also stock-friendly for that matter, which is probably why both stocks and bonds rallied in response. In general, Powell seemed to defend the possibility that the Fed wouldn’t hike rates as quickly as the low unemployment rate suggested. Unemployment is only one part of the Fed’s job. They also keep an eye on inflation and financial stability . On those counts, Powell said there wasn’t any clear sign of inflation accelerating above 2%, nor was there elevated risk of the economy overheating. In other words, ‘here are the reasons we DON’T need to hike rates too quickly.’ All rate-friendliness aside , Powell did remind us…(read more)Forward this article via email:¬†¬†Send a copy of this story to someone you know that may want to read it.

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Michael Ayoub, Author NMLS ID 6631