Financial Times

Powell splits the difference

Fed Chair Powell expressed uncertainty over monetary policy response to bank failures, and the Fed no longer anticipates ongoing rate increases. Bank stocks continue to underperform amid high risk.

Fed Chair Powell expressed uncertainty at a press conference yesterday over how monetary policy should respond to recent bank failures and near-failures.
The Fed no longer anticipates that ongoing rate increases will be appropriate to control inflation, instead anticipating that some more policy firming may be appropriate.
The Fed's economic projections were also released yesterday, with few changes for 2023 but rate expectations nudged up and economic growth nudged down for 2024.
Markets are now pricing in rate cuts later this year, as they look for guidance from the Fed.
Bank stocks continue to underperform, with banks coming in dead last among major industry groups in terms of annualised total returns over the past two decades.

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