QCAM: “The Powell Doctrine”

Fed Chairman Jerome Powell’s speech at Jackson Hole was widely viewed as dovish. The USD lost subse- quently 0.5% versus the EUR, while equity markets rallied and 10-year US Treasury yields inched lower.What inspired the market’s dovish read was Powell’s remark that “there does not seem to be an elevatedrisk of overheating”. In our view, the market’s read focuses too much on this one remark, which is taken out of context, and misses Powell’s general thinking on monetary policy making, which is much more rig- orous and in fact suggests that he is willing to lean more against the wind than his predecessors.

The full macro update is available at https://q-cam.com/wp-content/uploads/2018/08/QCAM-Macro-Update-27082018-EN.pdf

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