Stocks and Bonds Slump on Determined Fed
Fed Chair Powell’s keynote address in Jackson Hole last week may not have broken new ground, but it’s had a significant and lasting impact on the financial markets. Powell is determined to bring inflation down to the Fed’s +2.0% target, and readily acknowledges it will take some time and won’t be without pain. The lingering takeaway was higher rates for a longer period. There was virtually no counter-balance to Powell’s hawkish stance. He did not mention the possibility of overtightening, nor did he indicate rate hikes were nearing completion.