New Record Highs as Powell Reassures the Market

CNBC's Fast Money
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Automatic TRANSCRIPT

Does the market finally. Believe jay powell. Now if you watch us yesterday we asked why no one seems to believe the fed chief when he says rate hikes aren't coming anytime soon but today he couldn't have been clearer powell saying the fed isn't even thinking about thinking about hiking rates until twenty twenty four at the earliest and when they do finally move the market will have ample warning his comments. Reigniting the record rally with the dow. Snp closing at all time high. So does this mean really say it all all right just to reiterate. This is obviously the deepfake. Does it meaning ring. True guy a love. The mimi's shifts are my favorite. And i i guess the answer going back to last night it depends on what market you're talking about. The stock market absolutely believes him. And you know i. I'm somewhat hesitant to say it. But that's something you know. Tim and karen and steven been saying for a long time. Don't fight these guys in the stock market continues on. Its merry way the flip side of that coin. Is you know. Ten year yields are an indication. The bond market doesn't believe him because here we are at north of one point six percent and the ten year so one market does. The other market doesn't right now the. Us equity market is winning and for the purposes of that. Show our show tonight. That's probably good enough at the same time when race. Get high enough tim. We've seen it in the past when they touch six six seven which they did this morning when they go towards one seven The markets have a little bit of a tantrum so even though the bond market may not believe jay powell eventually the stock market's take the lead to the bond market. So the two are back intertwined. So what what do you think the answer at this. Point is jay powell making abundantly clear and clear to the markets market participants. That there is no intention on raising rates until not even forecasted economic metrics come true but they actually have to see it in the present very backward looking very subjective. We've been. Rick rolled twice this week on fast money. So there's a lot going on. And i think you have a case here where also the concept of the the absolute level of of bond yields on the ten year. What point are are equities in trouble. And i think that's maybe a bigger debate on some level because we just don't know i think the conversation that The fed may have lost control of the long end of the curve. Is the right one to have I think from from fed funds obviously out to five or six years. It's pretty clear that Today's action tells you that the fed is able to job. Here's something else about today. People aren't really talking about. They're out there saying they're going to continue to buy at least eighty billion treasuries and forty billion mortgage backs. At least so again the size of the bond tapering Is something that's also really tough to understand especially when the fed really upgraded the economy Tells you that four and a half percent unemployment rate by the end of twenty twenty one From not terribly far off the record lows that we you know of all time that we went into the pandemic with his still not good. Enough so let. The fed was very clear today. I'm most troubled by vicks. That's got a one thousand nine handle honestly fell eight percent and the volatility. This low tells me equities actually should be a little bit weary in the next couple of days. We're pre pandemic levels when it comes to the vix karen on what did you make it today and does it. Change your view on the markets. Well i'm always long. But i just have this image of of j. palace saying you know what i've taken the bull market hostage. I'm not gonna hurt the bull market in the bond market yelling electable market. Go and then. Powell says if anybody makes a sudden move the market dies and i think that's sort of a standoff that he's trying to reach with the bond market right we saw briefly would happen last month in a lot of weird things the mark you got a lot of sudden movements and the stock market really didn't like that at all but you know tiven guy said he couldn't have been more clear about how dovish he is now. I don't know if the data will force him to do something earlier he did. Say we're not gonna do it until the data makes us do it but if we start to see data change well then we'll have to think all right. He could be made to do it sooner. i don't really know i don't. It wasn't so shocking to me that the general rhetoric. I don't think it was so shocking to anyone but good for banks good for. I guess it was no giants surprise. More dovish than i thought but certainly we all thought that he was dovish going in. I had actually. I want to hear what he has to say about the supplemental leverage ratio. that's important for banks but he punted on that and rice and a couple of days. What he has to say about that is he. Did you say yeah twice. They've made it very clear he wasn't gonna say anything they're gonna say something in a couple of weeks and he's not gonna say anything about it anytime

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