by Rick Ackerman
Thursday’s psychotic price action showed what’s on the tiny, fevered brains of traders as they continue to drive the broad averages to ridiculous heights. Supposedly, the wack-jobs wanted Powell to say more than he did in his keynote address Thursday morning at the Jackson Hole conference. Here’s the Fed chairman in his own words. Judge for yourself whether a more measured response on Wall Street might have been appropriate: “Our longer-run goal continues to be an inflation rate of 2 percent … Our new statement indicates that we will seek to achieve inflation that averages 2 percent over time. Therefore, following periods when inflation has been running below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.” This is about as dog-bites-man as Fed announcements get, and so we should probably factor out the highs and lows Powell’s words produced on the intraday charts when we calculate targets for the near-to-intermediate-term. They will be rally targets, to be sure, since there is no evidence that Fed policy, such as it is, has caused investors more than a few nanosecconds of concern.