Cleanup on aisle five

It’s clear in an interview with Steve Liesman on CNBC that NY Fed president is trying to clean up and clarify the Powell pivot party. It begs the question as to why Powell was not assertive enough to do it himself at his presser so as not have this seemingly orchestrated commentary from John Williams today.

Anyway, paraphrasing and this was his very first comment, and I’m sure very planned, ‘We aren’t really talking about rate cuts now.’ He also added, ‘we need to be ready to tighten further.’ To the question about maybe cutting rates next year, he implied that it would only be natural to consider it. Also, QT will continue on he said as there remains a still ‘very abundant level of reserves. As for the markets response on Wednesday, ‘The market responded very strongly, maybe more strongly than what we were showing in terms of our projections.’

I don’t believe these comments were necessarily meant to change what the Fed ends up doing next year but an attempt to get back in control of events here. It’s not a good look for the Fed if the market starts running them over and again dictating what they should do. Powell got ran over on Wednesday and apparently after today, it doesn’t seem like he wanted that to happen.