Powell's communication in the cross-hairs
Looking through the Fed commentary today, the verdict is in: Powell did a poor job communicating.
I'm not sure that's necessarily fair. Let's say the Fed isn't sure what it's going to do next and that expectations are probably too high for a cut. That was invariably going to lead to market disappointment. It's clear to me the baseline is 1-3 cuts depending on how things shape up.
However none of that matters. At this point, perception is reality. Here's the homepage of CNBC:
Yesterday, Steve Liesman on CNBC said "I think Powell thinks he's a better communicator than he is"
The WSJ editorial board today wrote that "Monetary policy isn't a job with Jay Powell. It's an adventure."
That's not a good look for the Fed or Powell, who is already under fire from the President.
Expect some hastily-arranged appearances from Fed deputies in an effort to smooth over the perception and the path of rates. I expect them to emphasize some of the uncertainty that's out there, especially on trade. The safe thing for them to do would be to hint that this was an insurance cut while keeping open the possibility of more cuts if the global/US outlook deteriorates.
