Powell Pulls The Pin On A Panic Bomb: How I'm Positioned

In my opinion, it isn't a question of "if" we see economic panic. With rates at 4% and Powell as hawkish as ever, it's only a question of "when".

In jiu jitsu, we drill new technique at the beginning of class and spar at the end of every class. The general rule is that if you want to progress through the belt ranking system, you have to “go live” with another combatant and spar.

The thought process behind this requirement, in part, is to help “become comfortable with being uncomfortable”. In other words, if I spend several hours a week with a training partner who is legitimately trying to strangle me, it’ll be less of a shock and I’ll be calm and prepared when it comes from an unknown assailant on Philadelphia’s Market-Frankford Subway line (by the way, thanks Mayor Kenney!)

In part, that is some of the point of today’s article: to reiterate to myself the importance of patience and preparation, and to remind myself that things are playing out exactly as predicted so far.

Yesterday, for example, I wrote a piece ahead of the Fed decision warning that the market may be “booby trapped”, a term I used to describe what I thought would be a fake-out higher before an eventual move lower in markets.

Yesterday’s after Chairman Powell’s press conference, what had been a raging rally to new highs quickly whipsawed lower, and the market was plumbing new lows at the close.

And so today, I offer up my take on yesterday’s Fed decision and what I think it means for markets.