FOMC 25bp Powell Nervous

ISM continues to plunge

The FOMC decided to raise the FED FUNDS by 25bp putting the target range now up to 4.50-4.75%. Powell didn’t look very comfortable at the post decision meeting and we know why. This 25bp ancillary rate hike was nothing more than lipstick on a pig. We know that he knows inflation expectations have plunged and that they are driving the economy into a very dangerous head wind of consumer weakness moving forward. When asked about what it will take for the FOMC to throw in the towel on future hikes, he avoided giving any particulars, stating “we’re going to write down new forecasts in March.” Not really an answer by any means.

Even worse was his squeamish actions when asked about the FOMC providing the US Treasury with whatever it needs given the debt ceiling moving forward. To this point he simple answered “we are the FISCAL AGENT!”