The Moment Powell First Realized The Fed Is Held Hostage By The Market

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When Chair Powell last Friday shocked traders when he said that, contrary to what he had said just two weeks prior during the December FOMC press conference, the Fed could be “patient”, rate hikes could, in fact “pause”, and the Fed’s balance sheet reduction is not in fact on “autopilot”, the Powell Put finally emerged for the first time, and the result has been a torrid rally ever since.

It also prompted an avalanche of accusations that Powell folded like a cheap suit, held hostage by traders who pushed stocks low enough to i) test where the Powell Put strike price is and ii) force the Fed to halt its rate hikes, something it has now effectively done.

And yet,

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