This week’s hard-driving set from front man Jerome Powell of the Federal Open Market Crooners left rates untouched once again. Fans and critics alike expect the exact same performance at next month’s gathering, which will be broadcast real time (for free) via all the traditionally cool channels like PBS, CSPAN, CNN, CNBC, and Fox News. During this last Wednesday’s show, the bandleader himself took center stage to reaffirm that the Fed will continue reducing its $6.37 trillion stockpile of Treasury and Mortgage Notes.
When that prodigious amount of investment assets come up for grabs the unfathomable volume drives the prices down and the yields upward to attract the number of buyers needed to absorb the surplus inventory. Nevertheless, it’s a truly generous offering for the entire world of devoted admirers. Unfortunately, the result is that we will see upward pressure on the going interest rates of long-term debt like home loans. So that was hard news to swallow and it wasn’t unexpected when nobody in the audience clapped. Mostly they had a bunch of questions, which Mr. Powell magnanimously fielded.
To wrap up the after party, rock star Powell noted that “the Committee will continue to monitor the implications of incoming information…and [will] be prepared to adjust…monetary policy if risks emerge that would jeopardize [the goals of the Fed regarding the labor and financial markets]”. How does he come up with such emotionally evocative and thought provoking lyrics on the spot, and deliver them with absolutely no voice intonation? He’s a true legend of our time.
Like all great artists, this leader of the independent branch of the federal government is unashamedly in tune with the desires of American hearts, even if we don’t know it. Just the fact that the FOMC can be so flexible with their six trillion dollars in assets and the fate of the pocketbook of every American hanging on every syllable that comes out of their mouths is mind blowing. The CME Group, who aggregates sentiment from die hard groupies of Mr. Powell and his band, forecast that any hint of a rate cut will be deferred yet again until the September 17th reunion tour. Man I can’t wait.
