hey tradomaniacs,
As expected Jerome Powell causes huge moves in the market.
So what did he say and why is his statement causing such a sell-off? One thing is for sure, he is really dissapointing the market!
First of all, what could he have said to cause euphoria?
1️⃣He could have aoounced an prolongation of the Supplementary Leverage ratio (SLR) banks calculate the amount of common equity capital they must hold relative to their total leverage exposure with.
This could have calmed down the markets.
2️⃣ He could have announced an Operation Twist, which would probably have caused a boost for stocks and lowered the yields.
As explained, with this method the FED would sell short-term-bonds in order to buy long-term-bonds. YIELD-CAPPING without extra liquidity.
3️⃣ He could have announced a Yield-Curve-Controle in order to cap the yields with fresh liquidity.
This could have had an mixed impact, as it would drive inflation-worries due to extra liquidity provided by the FED but also cap the yields due to rising Bonds.
So what did he say? Nothing new, and he seemed to be pretty confident compared to the European- and Australian Central Bank.
1️⃣ Still far away from our goals, but job-market should improve due to vaccinations.
2️⃣ Expecting inflation to rise but it is still unknown whether this is going to continue or not as there are deflational effects. We have the necessary tools!
3️⃣Would be worried if financial condotions are getting worse. Rise of yields can have various of reasons.
4️⃣We won`t raise interest-rates as long as we haven`t reached our goals. We don`t have to take action as long as inflation isn`t lasting.
He keeps talking with a dovish tone, which is pushing the inflation-worries❗️
Result: Pumping YIELDS as Jerome Powell acts like there is no inflation 👉Stocks are bleeding and US-DOLLAR goes up!
Just ridiculous!😂
Will this continue? Tomorrow we will get to see the Non-Farm-Payrolls, and if they are worse than expected it could either confirm Jermome Powells statement and YIELDS finally fall or the market could even price in more inflation-worries and US-DOLLAR rises with YIELDS.
It will be interesting!
LEAVE A LIKE AND A COMMENT - I appreciate every support! =)
Peace and good trades
Irasor
Wanna see more? Don`t forget to follow me
As expected Jerome Powell causes huge moves in the market.
So what did he say and why is his statement causing such a sell-off? One thing is for sure, he is really dissapointing the market!
First of all, what could he have said to cause euphoria?
1️⃣He could have aoounced an prolongation of the Supplementary Leverage ratio (SLR) banks calculate the amount of common equity capital they must hold relative to their total leverage exposure with.
This could have calmed down the markets.
2️⃣ He could have announced an Operation Twist, which would probably have caused a boost for stocks and lowered the yields.
As explained, with this method the FED would sell short-term-bonds in order to buy long-term-bonds. YIELD-CAPPING without extra liquidity.
3️⃣ He could have announced a Yield-Curve-Controle in order to cap the yields with fresh liquidity.
This could have had an mixed impact, as it would drive inflation-worries due to extra liquidity provided by the FED but also cap the yields due to rising Bonds.
So what did he say? Nothing new, and he seemed to be pretty confident compared to the European- and Australian Central Bank.
1️⃣ Still far away from our goals, but job-market should improve due to vaccinations.
2️⃣ Expecting inflation to rise but it is still unknown whether this is going to continue or not as there are deflational effects. We have the necessary tools!
3️⃣Would be worried if financial condotions are getting worse. Rise of yields can have various of reasons.
4️⃣We won`t raise interest-rates as long as we haven`t reached our goals. We don`t have to take action as long as inflation isn`t lasting.
He keeps talking with a dovish tone, which is pushing the inflation-worries❗️
Result: Pumping YIELDS as Jerome Powell acts like there is no inflation 👉Stocks are bleeding and US-DOLLAR goes up!
Just ridiculous!😂
Will this continue? Tomorrow we will get to see the Non-Farm-Payrolls, and if they are worse than expected it could either confirm Jermome Powells statement and YIELDS finally fall or the market could even price in more inflation-worries and US-DOLLAR rises with YIELDS.
It will be interesting!
LEAVE A LIKE AND A COMMENT - I appreciate every support! =)
Peace and good trades
Irasor
Wanna see more? Don`t forget to follow me