Did Powell Just Give Investors a (further) Big Green Light?
- Chairman Powell did not throw any cold water whatsoever on the recent narrative that says the Fed will cut rates in a meaningful way next year yesterday. Assuming this doesn’t mean the Fed is now worried about a recession; it has given investors the green light to keep buying risk assets with both hands.
- We do need to point out that both the bond and stock markets are becoming quite overbought on a short-term basis. Therefore, they could see some sort of near-term pullback before long. However, like we said, Chairman Powell gave investors a big green light yesterday. (God help him if it turns out he is steering investors in the wrong direction.)
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