Remember Fed Chair Powell’s rookie mistake during the 2016-2018 rate hike cycle? At the end of 2018 JPow sparked a market tantrum when he said that the federal funds rate was probably a “long way” from neutral. If a 2.25 target federal funds rate is a long way from neutral, where are we now? These days, a neutral policy stance must be in a galaxy far, far away. With such an easy policy stance, is it even possible for Powell & Co to shock the market out of its liquidity-induced slumber by dropping the proverbial taper bomb at the virtual Jackson Hole event later this afternoon?

 

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