Waiting on Fed Chair Powell

The 10 year treasury is popping – now at 1.68%–up 6 basis points and now we wait.

The Fed will have their policy statement at 1 pm (CDT) today with a Powell press conference shortly thereafter.

Of course the Fed has announced time and time again that they would keep interest rates low for a very long time based upon inflation and employment. We all know that – they have boxed themselves into a corner and any mention of lifting short rates anytime soon is going to be a problem for the markets.

Investors had a ‘pause’ in rates last week and should have made sure they have their portfolio holdings where they want them.

For me, expecting higher rates in the next few months, I reduced high quality holdings prior to the increase in rates in the last few months. I then bought numerous issues of investment grade issues after they fell—and sold a fair portion for capital gains during the interest rate ‘pause’ last week.

I now have plenty of cash to purchase if we see pricing fall over the course of the next month or two.

4 thoughts on “Waiting on Fed Chair Powell”

  1. The statement said today that the Fed would buy at least $80 B of T bills and $40 of mortgage related securities. Is that the first time that they said “at least?”

    In the Q & A Powell seemed to imply that any kind of Twist was unlikely?

  2. the fed is giving us the old slew foot …………….. and there is nobody to blow the whistle

  3. I’ve got some cash waiting in the wings, also.

    But, Powell’s going to to say whatever the admn. wants him to say. Don’t think he’s Volcker-esque minded, independence wise.

    1. If the dumb money moves the market one way or the other based on Powell’s words, then I’ll be contrarian and play the opposite side.

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