by Steve Goldstein
So just how significant was Federal Reserve Chairman Jerome Powell’s speech on inflation? In the speech that markets were eagerly awaiting, Powell announced the Fed would target inflation to average 2% over time, and that the central bank won’t feel obliged to raise interest rates if it believes the economy is running at full employment.
The S&P 500 US:SPX on Thursday edged up to a new record, while the Nasdaq US:COMP slipped, though to its second-highest perch ever. U.S. Treasury yields rose, particularly at the long end BX:TMUBMUSD30Y, which isn’t the direction you would expect from an ostensibly dovish move. Perhaps, as University of Oregon professor Tim Duy wrote, the market perceived there was no “meat on the bones of this policy” because the central bank left implementation fuzzy.