The Federal Reserve’s decision not to hike interest rates after a “do-nothing” meeting has sparked debate about its true intentions. However, according to Joseph Wang, an ex-New York Fed trader, the real reason behind the decision is that the Fed is waiting for hard data confirmation before taking action.
Wang suggests that Chairman Jerome Powell’s message was actually dovish, rather than hawkish, and that he wants to monitor the situation before making any decisions. The Fed is currently ignoring a recent plunge in soft data, which includes surveys of consumers and businesses, until it sees a corresponding decline in hard data.
This decision marks a significant shift from previous meetings, where the Fed had expressed concerns about inflation and economic growth. However, with interest rates still relatively low, Wang believes that Powell may be trying to signal a potential rate cut, rather than an increase.
Source: https://www.marketwatch.com/story/heres-the-real-reason-stocks-rose-after-a-do-nothing-meeting-says-this-ex-new-york-fed-trader-a8e85583