Macro Brief: A look at Powell’s testimony
Head of Macro Analysis
Summary: Welcome to the first edition of Saxo's morning macro brief on the main events that will influence markets in the session ahead.
This new “dovish” stance, which also confirms that the Fed is “data dependent” but also “market dependent” (the change of tone happened as markets started to worry about economic growth and the risk of recession) may be a positive news in the short term – investors show confidence again – but a worrying signal in the medium/long term. Looking at the chart below, a “dovish” Fed is not necessarily a good sign as it announces that an economic downturn is on the way. Sometimes good news (in the short-term) is bad news (in the long run).