Alternative Path

[gdl]

Powell sparked the current rally by using the word DISINFLATION while both maintaining a stance that more rate hikes is needed but the employment market doesn't seem to spark higher inflation. In other words double talk intended to wait out the next direction. I would say the party is about over for Powell. The January numbers combined with China opening and the proof that retail sales was up 6% despite the rising inflation suggests he should KEEP HIS MOUTH SHUT on disinflation. In fact what he did was expand this huge bubble even further and made it more difficult to prevent a POP!

The street will of course get out of the speech what they want to hear and Powell has a great knack for pleasing everyone. I do believe NOW that he KNOWS the dangers of waiting to declare the inflation fight has moved from the sidelines to actively trying to stall it. But hey today we will know definitively despite his double talk.

The first shot along the bow was last Fridays shocker. Since Powell gets data points we do not he should have a decent idea how inflation is seen moving forward. TODAY will be the second shot.