The five stages of Fed grief

THU, AUG 01, 2019

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF THU, AUG 01, 2019 • 12:05 ET

DJIA		27131.48
		+0.99%	+267.21

S&P 500		3009.50
		+0.98%	+29.12

NASDAQ		8295.13
		+1.46%	+119.71

EDITOR'S NOTE

Stage one (2:01 p.m. yesterday): acceptance. Fed cut rates! Great. Just as expected. Markets nonplussed. The dollar's rallying, though...

Stage two (2:02-2:45ish p.m.): denial. Wait...they only did a quarter-point? Wait, they're just "monitoring," not closely monitoring the economy for future developments?? Wait...are more rate cuts definitely coming?? We are gonna get "dovish Powell" in the press conference again, right??!

Stage three (2:45ish p.m.): panic. What the h#$$ is this "mid-cycle adjustment" crap??? No more rate cuts? Rate hikes??! Powell is totally blowing it!!! Dow drops more than 400 points, dollar hits a two-year high, yield curve is flattening.

Stage four (overnight): disgust. Powell was "clumsy" (Saxo Bank). He lacked "a definite narrative" (Stifel et al). "As usual, Powell let us down" (Trump). Markets hate it, although the 10-year yield is back below 2%...

Stage five (after the open): euphoria. "...we are not changing our call for another 25 basis point rate cut in September" (RBS). "We remain concerned about the Fed needing to deliver more easing than is priced" (BNP Paribas). Dow's up 300 points. More rate cuts are still coming after all!!! (Right...?)

See you at 1 p.m. Maybe we'll have a stage six by then ;-)

Kelly

Kelly Evans

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