JPMorgan is not fully on board with Powell’s message re more to be done on inflation

JPMorgan were perhaps a little unking to Federal Reserve Chair Powell after this comments on Thursday, saying the remarks were those of a two-handed economist. Paraphrasing:

  • there is progress on inflation BUT there is still a “long way to go,”
  • while labor markets are tight BUT they are moving towards “better balance”
  • economic growth is strong BUT expected to moderate

Yes they are two-handed, like an economist, but none of the above is wide of the mark.

From a note to clients:

  • “The forward-looking implication is that the so-far immaculate disinflation may get a little more painful in the future”
  • “We still believe the Fed is done hiking for this cycle, but today’s speech should serve as notice that their rhetoric must stay hawkish until they’ve seen further improvement in inflation.”

JPM continues to expect the rate hike cycle is over. I’d be wary of locking that view down for certain given the view of the big guy in charge:

This article was written by Eamonn Sheridan at Source