"I Have Nothing for You" - Jay$

In keeping with the last four meetings, there were some dissents. Both Miran and Waller preferred a 25bps rate cut. Miran we knew would happen, but Waller? I’m sure his vote was in no way a last-ditch effort to become Fed chair…

There were a lot of questions that Powell refused to answer and simply said, “I have nothing for you.”

• If the President picks a Chair before May, how will that impact you? I have nothing for you.
• What do you think about the falling dollar? I have nothing for you.
• How do you feel about the DOJ subpoena? I have nothing for you.
• Senator Tillis said he will block any Chair nomination, do you support this? I have nothing for you.
• Will you leave the Fed after May? I have nothing for you.

He did respond to one touchy question. He was asked why he attended the Supreme Court hearing, Trump v. Cook. “This is perhaps the most important legal case in the Fed’s 113-year history, so I thought it was important to be there.”

Perhaps the only interesting part came toward the end when he was asked what advice he would give to the next Fed Chair.

• “Stay out of elected politics. Don’t do it.”
• “Our window into democratic accountability is Congress. It’s a regular obligation. If you want legitimacy, you have to earn it. I believe I’ve done that.”
• “It’s easy to criticize government institutions, but you are about to meet the most qualified professionals you will ever work with.”

The few interesting quotes

“There was broad support for holding today. Broad.”

• That’s a shot at the dissents

“It isn’t anyone’s base case that the next move will be a rate hike.”

• Cough cough JPM

“Most of the overrun in prices is from tariffs, which is good news. Core PCE would be running just over 2% ex tariffs.”

• Inflation isn’t our focus right now

“We are at the higher end of the range of plausible estimates for neutral.”

• The landing spot might be a little lower than here, but not much

“It’s hard to look at the incoming data and say rates are significantly restrictive.”

• We can be patient here, but thank you for your thoughts Miran

The next FOMC meeting is scheduled for March 18th, with market odds for a cut are just 11%. With two more inflation reports and two more job reports, the FOMC will have more data in hand by the next meeting, so that may change.

The first odds of a cut exceeding 50% are at the June meeting. I continue to believe there is some chance of no cuts this year, but the market puts that at just 13%.

Rates are unchanged since Powell started talking, which is exactly what he hopes for at each meeting. That means the Fed signaled the market effectively heading into the meeting.

In the words of the immortal Jay$, I have nothing for you.