Stocks erase post-Fed losses as Powell explains away hawkish shift as “language clean up”
If you don’t like what a central bank is saying, just wait five minutes. It turns out the Federal Reserve sank stocks briefly today by saying too little.
One seemingly hawkish element in the central bank’s policy statement was the removal of a reference to inflation making progress toward its 2% objective that had been there in December.
During the press conference, Powell said the tweak was not intended to be a signal of anything; monetary policymakers just wanted to shorten the sentence.
That shorter sentence played a role in sending stocks lower, and that explanation helped erase those losses. The SPDR S&P 500 Trust had erased losses from 2 p.m. ET, when the Fed’s communique was released, but then went back down after Powell implied that the central bank would not be looking to lower rates in March.
As I’ve told many an editor, brevity is NOT the soul of wit.
