After reviewing Willy Whipsaw’s deviltry in the markets of May 2-6 (1:34) and the week’s macro news (10:16), Jeff Mayberry and Samuel Lau dive (14:03) into the May 4 meeting of the Federal Open Market Committee, which raised the range of Federal Funds rate by 50 basis points, and Federal Reserve Chairman Jerome Powell’s news conference. While the risk markets rallied that Wednesday on Powell’s ruling out for the time being 75 bps move hikes, Jeff and Sam in particular focus on the Fed’s guidance on the pace and timing quantitative tightening. QT is scheduled to start June 1 with potential reductions of $30 billion in Treasuries and $17½ billion in Agency MBS, shedding those assets at a pace of up to $60 billion and $35 billion, respectively, in subsequent months. 

Looking ahead the week of May 9-13 (31:40), Jeff and Sam will be watching Wednesday for the Consumer Price Index for April, and Thursday for the Producer Price Index.

MMM Episode 64: A Wild Whipsaw and a Tightening Fed Star the Week of May 2-6

Monday Morning Minutes