text speech from Fed chair Jerome Powell had an overall tone that could be described as pretty balanced and fairly neutral. Key lines from the text were that the Fed “will act as appropriate to sustain the expansion” and that the 3 weeks since the last meeting were “eventful”. There was no mention of the “mid-cycle adjustment” that roiled markets last time out and this speech seems to be almost deliberately neutral, possibly offering little by the way of firm conviction in light of the recent China tariff news. In terms of market reaction it was a bit of a mixed bag with yields ticking lower along with the USD while stocks moved off their recent lows.
However, not long after this Trump embarked on an incredible attack on China via social media with the tone and content of his messages extremely strong even by his own lofty standards. The markets had recovered most of the earlier losses on the China news around half an hour after Powell’s speech but Trump’s remarks have sent shockwaves through the market and dashed any hopes of a de-escalation on the trade front anytime soon.