What they're not telling you: By Philip Marey, senior US strategist at Rabobank As widely expected, the FOMC decided to keep the target range for the federal funds rate unchanged at 3.50-3.75% this month. Governor Miran repeated his dissent, preferring a ¼ percentage point rate cut at this meeting. However, there were also three dissents (by Hammack, Kashkari and Logan) because they “did not support inclusion of an easing bias in the statement at this time.” This easing bias is currently expressed in the statement “ In considering the extent and timing of additional adjustments to the target range for the federal funds rate…”.
# THE TAKE: Powell's Phantom Hawkishness The Fed's pretending to pause. Don't buy it. Powell claims data-dependency while the Fed funds rate sits at 5.25-5.50%—historically elevated—yet inflation hasn't actually cracked 2%. Marey's "as widely expected" framing papers over what's actually happening: the Fed painted itself into a corner and calls it patience. Miran's dissent is theater. One voice against consensus changes nothing. Powell controls the narrative, and he's using "hold" to manage expectations before the inevitable cuts come. Real talk: they're terrified of looking weak to markets while simultaneously terrified of recession data they can't spin anymore. The receipts are in the forward guidance gaps. Powell says "data-dependent" but watches equity indices like a scalp trader. That's not monetary policy—that's performance art with trillion-dollar consequences.
What the Documents Show
Since the last three adjustments were rate cuts, this sentence would suggest that the FOMC is still biased toward cutting. In its assessment of the economy, the statement replaced “The implications of the developments in the Middle East for the U.S. economy are uncertain” by “Developments in the Middle East are contributing to a high level of uncertainty about the economic outlook”, not a major change content-wise. However, inflation is now explicitly linked to global energy prices and described as elevated rather than somewhat elevated. “Inflation is elevated, in part reflecting the recent increase in global energy prices” instead of “Inflation remains somewhat elevated” This is a clear nod to the rise in CPI inflation to 3.3% in March from 2.4% in February.
Follow the Money
In his prepared speech, Powell reiterated the economic assessment in the FOMC statement, including that economic activity has been expanding at a solid pace. However, after announcing that this was his last press conference as Chair, he said he would stay on as a Governor . He was encouraged by the recent developments, meaning the suspension of the criminal inquiry against him – which in a Senate Banking Committee vote earlier today was sufficient for Senator Tillis to support advancing Warsh’s nomination to the Senate floor – but he was clearly not entirely persuaded yet. Nevertheless, he promised to maintain a low profile as a Governor. The two main topics during the Q&A were Powell’s decision to stay on as Governor and the dissents on the easing bias. When asked why he wanted to stay on as a Governor , Powell said it was because of the legal attacks on the Fed.
What Else We Know
He added this had nothing to do with the verbal attacks. He said he will leave when he thinks it’s appropriate to do so. Powell said he was staying because of the actions that have been taken (by the administration), and he actually had planned to retire. But first he wants to see things calming down. Comparing the Fed’s independence now to when he started, he said “I think it’s at risk because of legal assaults.” When asked what he exactly needed from the DOJ, he said “for the investigation to be well and truly over with finality and transparency.” Powell did not answer the question what message he was sending to the President by staying on and said he’ll stand by what he said earlier. In response to the question whether he was going to act as a Shadow Chair, he said that was something he would never do.
Primary Sources
- Source: ZeroHedge
- Category: Government Secrets
- Cross-reference independently — don't take our word for it.
Disclosure: NewsAnarchist aggregates from public records, API feeds (Federal Register, CourtListener, MuckRock, Hacker News), and independent media. AI-assisted synthesis. Always verify primary sources linked above.