Jerome Powell opened his mouth, and markets held their breath… but if you expected fireworks, you were probably disappointed. I’ve been in the cockpit most of the morning, and from what I can tell, Powell’s comments were more of the same “we’re data dependent” fluff.
Meanwhile, we’ve got political noise heating up around the Fed, but don’t get lost in the fantasy of a libertarian Fed audit. You’ll just end up reading 800 pages of bureaucratic mumbo jumbo.
Let’s get into the action…
Key Takeaways
1. Forget Powell — Watch Bessant
- Representative Bessant is driving the Fed narrative more than Powell right now.
- The push to audit the Fed might not uncover anything scandalous, but it tells us where political energy is headed.
2. Earnings Season Ain’t Dead Yet
- Traders are acting like it’s over, but we’ve still got landmines out there. I’m watching for negative momentum reactions, especially after big earnings beats.
- One bad report could derail sentiment fast. Keep your finger on the trigger.
3. Small Caps Still Screaming Risk-Off
- The Russell is telling the real story of economic anxiety.
- Until we see real momentum return, I’m skeptical of this “everything’s fine” narrative from the big dogs.
What I’m Watching
I’m watching for sentiment cracks to appear under the surface — especially in rate-sensitive areas like REITs and small caps. If Powell’s comments don’t prop up those sectors, the next leg down could get ugly. And if Bessant keeps pushing on the Fed, that could trigger some unexpected volatility.
Complacency is the killer here. Don’t let the lull fool you — there’s turbulence ahead.
Until next time,
Garrett Baldwin
TheoTRADE
