We expected a hawkish tilt to the Fed’s speakers this week – in confusing opposition to Yellen’s dovish commentary – and after Harker’s earlier comments, it appears Fed’s Evans comments that he “sees more upside possibility in uncertainty” facing The Fed, has sparked a wave of selling in stocks…
- *EVANS SEES MORE UPSIDE POSSIBILITY IN UNCERTAINTY FACING FED
- *EVANS: LOWER CAPITAL EXPANSION MAY REFLECT LOWER TREND GROWTH
And Evans offered this more hawkish bias too…
“This is a challenging time period to all of a sudden have a big injection of positive fiscal policy expansion because we are pretty close to full employment. We might be at full employment,”
In other words, any Trump success (in a fiscal boost) will be met with more rate hikes.
That’s not what the market wanted to hear…
This worried perspective follows Harker’s earlier hawkishness:
- *FED’S HARKER: CAN’T RULE OUT MORE THAN THREE HIKES THIS YEAR
- *FED’S HARKER: WE ARE DISCUSSING THE BALANCE SHEET
- *HARKER: BALANCE SHEET TILT SHOULD BE TO TREASURIES, LESS MBS
Bonds don’t seem to care…
via http://ift.tt/2nWRNgt Tyler Durden