Logging my thoughts as I listen to Powell this morning:
Listening to Fed Chair Powell as I type. His commentary was everything the market could ask for. In the followup interview, the interviewer just posed the question that killed the market at the recent press conference (on the balance sheet). Powell is struggling with it, but he’s stopping short of using the “autopilot” term that was so destructive a few weeks ago.
That line of questioning is over now and he didn’t crash the plane, so to speak.
As I type the Dow’s up 620.
Now, this morning’s euphoria aside; the risk here is that it sends a message to Washington that everything’s wonderful and that the U.S. can afford to play more hardball with China in the coming weeks. I absolutely promise you, if the Administration misreads the market on this one, and goes where I just mentioned, any gains we may see on what we should now view as a very willing Fed will disappear in a heartbeat. But, of course, in that event the U.S. would soften its China stance in a hurry; let’s just hope that’s not necessary at this point…
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