The Narrative Flips… The Fed Reports You Should Be Watching

Last week, leaders from the U.S. and China effectively kicked the tariff tantrum down the road. With that uncertainly moderated as we wait for the next chapter in that long-running story, a presidential tweet yesterday morning confirmed this posture (highlighting is mine):


And with that, an old market narrative becomes the driving force for the short run.

We’ve seen that in the short-term market pullback to start this week. That was because of… (wait for it…) a really good employment report last Friday, where an increase in jobs of 224k was reported vs. 160k expected. Monday and Tuesday were full of angst that this good news could trigger the Fed to forego an interest rate decrease, and hence good economic news became bad news for the market.

And that “good economic news is bad for the markets” theme is a very obvious tell of a period when the dominant market narrative is the whether the Fed monetary policy will accommodate or tighten.

Fed Chair Powell’s prepared statement was released this morning that had the statement that the economic “outlook continues to dim”. Can you tell on this chart when said statement was released?


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