Powell’s latest remarks: neutral to dovish

Powell just wrapped up his speech — overall, it leaned neutral to dovish. Two key takeaways:

First, he said that despite the current spike in oil prices, long-term inflation expectations remain stable. So the Fed hasn’t made any decisions yet — meaning rate hike expectations aren’t high.

Second, he noted that the Fed’s asset purchases — i.e., balance sheet expansion — help lower interest rates and support the economy. That’s actually the opposite of the tapering expectations that have been circulating.

Alright, neutral to dovish. The reaction from both stocks and bonds confirms that. But we’ll still need to see how oil prices react tonight. As long as oil holds steady, things should be fine.

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