Mr. Powell Please Quit Talking

Fed Chairman Powell spoke again this last week and once again scared the bond markets with his words. Why? He said inflation is set to increase but he believes this increase will be transitory or temporary. Second, if we do see inflation we will be patient before raising short-term rates. I would love to know what former Fed Chair Greenspan thinks about these comments. I bet he is frustrated and concerned about Powell’s comments too.

The Treasury will be selling $62 billion of new 10 Year Notes and 30 Year Bonds this week and I sure hope these 2 auctions go better than the last 4 auctions. If not, don’t be surprised if mortgage rates hit 3.50% by end of the week.

I have read that the single biggest danger for our stock market is the belief or fear that the Fed can’t control inflation or interest rates anymore. And with Chairman Powell’s continued comments every time he speaks about their lack of concern about of inflation rising scares me as I am now hearing the “Inflation Genie in the Bottle” knocking hard.