Kevin Warsh held rates at 3.75% to 4%. Then he talked tough. Holding steady and talking tough are the same move, if you're a man who wants credit for both.
Two dissenters wanted a hike. They lost. Nobody told them the Fed only swings when the market has already left the building.
Warsh stressed there is "no soft inflation target." Two percent. Nothing higher. Inflation has been told. Inflation is not listening.
He also plans fewer rate-setting meetings in coming years. The Fed is cutting meetings. Not rates. Meetings. It's the first real austerity of the cycle, and it's aimed at the Fed's own calendar.
Retail traders will spend the next hour parsing his press conference for hidden meaning. There is none. The man opposed hand-holding for markets at Jackson Hole. He is not going to start now. Your feelings are not a reaction function.
Market odds of a December hike stayed above 80% before and after the news. Read that again. The Fed spoke for an hour and moved the odds by nothing. A chart does that for free, and it doesn't wear a tie.
Then there's Micron. Up nearly 6%. Four straight sessions. The financial press needs a reason, so it found one. Memory chips went up because memory chips go up, right until they don't. The 50-day moving average was available all along, free of charge, and it said nothing about Warsh.
Somewhere a retail trader bought Micron at the top of day three because Jim Cramer's club said "rally." He'll sell on day five. He'll call it discipline.
Warsh wants two percent. You wanted a Lamborghini. Neither of you is getting what you asked for.
Photo by Brecht Corbeel on Unsplash
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