RTM Lite: That's Why They Play The Game

EOD

So, all the hoopla about Nvidia and how it would power the markets higher didn't play out today. Perhaps because macro forces at this point in the game are too strong, Powell can shift things around tomorrow by being too hawkish or too dovish, which can change the outlook of where the market goes. 

But my guess is that he has the dollar strengthening right now, which helps him and makes his job easier. He also has rates on the back of the curve rise, which helps him. So, I think he will try to keep those trends in place.

I think the best way for him to go about this is to remind investors that we are in a higher rate regime and that structural shifts that have occurred since COVID-19 could mean higher rates over a longer period. I think this would be a subtle message that the Fed is thinking that the neutral rate of the economy is higher than previously thought, and it will result in real rates staying higher than expected. This would not be good for stocks, but it would also not upset things and keep the current trends in place.