It doesn’t get more pathetic than this. After the Fed’s “disappointing” 25 basis point rate cute, divided FOMC vote and failure to guarantee more cuts just around the corner, Pusillanimous Powell saw the markets barfing and therefore stumbled forth with the following 2o-word ignition switch:
It is certainly possible that we’ll need to resume the organic growth of the balance sheet sooner than we thought.”
And then the algos were off to the races the moment Powell implicitly confirmed that QE4 is indeed on the way. At exactly 2:50pm stocks spiked and the dollar slumped.
So there can no longer be any doubt at all that the Mighty Fed has been reduced to the status of Wall Street’s pitiful bitch and that the Donald might as well fire Chairman Powell and replace him with, well, a weathervane.
After all, it doesn’t get more equivocal than this:
“There will come a time, I suspect, when we think we’ve done enough. But there may also come a time when the economy worsens and we would then have to cut more aggressively,” said Mr. Powell at a news conference Wednesday. “We don’t know.”
He got that right. The Fed heads have no idea what they are doing—so they are taking their cues from the most greedy, aggressive traders on Wall Street who believe the Fed owes them nothing less than a stock market which rises every single day.
That is to say, hyped-up on massive leverage through publicly traded options and privately bespoke structured trades, their level of entitlement, greed and recklessness knows no bounds.