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According to Robert Rennie, research analyst at Westpac, Fed Chair Powell’s recent ‘just below’ comments were mostly ignored by the markets.

Key Quotes

“Markets spent little time debating the significance of Powell’s ‘just below’ comments in NY yesterday. The contrast between his views just 8 weeks prior that ‘we’re a long way from neutral at this point’ and yesterday’s that we are ‘just below’ could not have been clearer to the S&P500 which registered its biggest advance since March.”

“Now it may be the case that there is missing context: Powell appeared to be referencing a single neutral point in the Judy Woodruff interview October 2, while his speech yesterday clearly referenced the “broad range of estimates of the level that would be neutral for the economy”.”

“To be sure, the Fed and many private sector economists “are forecasting continued solid growth, low unemployment, and inflation near 2%” so its clearly the case that rates will continue rising at a gradual pace.”