“We’ve been front-end loading these very large rate increases, and now we’re getting closer to where we need to be,” Fed Chair Jerome Powell told reporters.
Of course, Powell said, another “unusually large” increase could be on the table too. But Wall Street looked past that.
What came next: Investors cheered Powell’s apparent pivot. The S&P 500 rallied, notching its best month since November 2020, and financial conditions eased. Mortgage rates fell below 5% for the first time since mid-April.
Now, Fed officials are trying to set the record straight. Not wanting markets to change course too sharply, reversing the effects of their hard work thus far, they’ve been talking tough again.
“[We’re] nowhere near almost done,” San Francisco Fed President Mary Daly said in an interview on LinkedIn last week.Loretta Mester, head of the Federal Reserve Bank of Cleveland, told the Washington Post that it “would be inappropriate … to cry victory…
