The faith of the followers of Fed Chairman Jerome Powell is fickle.
Yesterday, Powell set the market on fire with hope by putting a ceiling on rate hikes. The Fed would probably raise rates by 50 basis points a couple of more times, Powell said, before dropping the hikes down to 25 basis points when inflationary pressures showed signs of lifting, likely around September. The idea of a 75 basis point hike, which had been the talk of Wall Street in the week or so prior to the meeting, was not even a subject of polite conversation at the central bank.
Cue the Dow Jones Industrial Average soaring 923 points, the S&P 500 gaining nearly three percent, and the Nasdaq Composite rising 3.19 percent. It was as if all the no good, rotten, very bad developments that had dragged down the market in April—Russia’s Ukraine attack, the looming recession, China’s lockdowns, out-of-control…
