No help, no hints at help

No help, no hints at help

The market wanted Powell to throw a bone to the bond market but he essentially shrugged at the bond market's recent moves. He didn't go as far as some Fed presidents who said the higher yields reflected economic improvement but he didn't offer any hint at action or even displeasure.

The most he said was that it caught his eye and that he "would be concerned by disorderly condition" and a persistent tightening of financial conditions. The obvious subtext to that is that we're not in that position now.

The market is doing some kicking and screaming with US 10-year yields now at the highs of the day, up 6 bps to 1.54% in what will be a cycle high close and not too far from the 1.61% spike high last week.

The move puts market participants in a tough spot. The reality is that the Fed is still very loose and Powell hasn't talked back any of that. At the same time, the market wants to absolutely own the FOMC, it wants a hug any time it feels sad. With this move, Powell is showing that he wont' be steamrolled and that has implications down the road when real tightening begins.

I expect this will surely be a dip to buy and a rip to sell in USD but is now that moment? I think it could be but with this kind of kicking and screaming, it can get ugly before it gets better. I'll wait for signs of stabilization or technical support before wading in.

What's particularly concerning is the persistent selling in tech. There's no guardrail on that because many tech valuations are stupidly high (I'm looking at you Elon). Technically, the Nasdaq is shaky and nothing I hear about Cathie Wood inspires confidence in ARKK.