Powell tried to push back but that lasted only a few seconds in Treasuries

Whereas the market thinks it’s as easy as the Fed is done and cuts are coming next year, the speech he’s giving today is purposely meant, I believe, to try to keep the markets offsides. I say ‘somewhat’ because it wasn’t forceful and the markets aren’t being swayed as the immediate reaction of the markets when the headlines hit the tape was to sell off Treasuries but as I write this, it rallied right back and yields are below where they were when the comments came out.

He acknowledged and welcomed the slowdown in inflation with the six month annualized rate thru October for core now at 2.5% but said “that progress must continue if we are to reach our 2% objective.” Also, he reminded us of the lag that monetary policy flows thru in impacting the economy “and the full effects of our tightening have likely not yet been felt.” This I thought was a message to markets, “The forcefulness of our response to inflation also helped maintain the Fed’s hard-won credibility, ensuring that the public’s expectations of future inflation remain well anchored.”