Wall Street Reading of Powell's Hawkish Speech: Data Scarcity Leads to Increased Fed Disagreement

BlockBeats News, October 30th, in response to Federal Reserve Chairman Powell's hawkish speech last night stating that "given the internal dissent within the central bank and limited visibility, a rate cut in December is not a foregone conclusion," major Wall Street fund managers have offered their interpretations:

Brandywine Global Portfolio Manager Jack McIntyre: "Flying with one eye closed, the Fed views the labor market slowdown as a more concerning issue than inflation stickiness. Considering that labor statistics are lagging indicators and monetary policy has a time lag, this stance is reasonable. Therefore, for October, the Fed would rather choose to further cut rates just in case. However, the strange range of dissent is more difficult to understand. Milan's request for a larger rate cut can be seen as overly dovish and thus ignored. But Schmidt's opposition to a rate cut, along with Powell's comments at the press conference — where he expressed a desire for the Fed's view on potential future rate cuts to remain somewhat detached from the market's expectations for December — should not be underestimated. This dissent implies that the financial market's complacency will weaken, volatility will intensify, and two-way fund flows will become more frequent."

LPL Financial Chief Economist Jeffrey Roach: "The downside risks within the employment market are likely to ensure that the Fed continues to cut rates in December and throughout next year."

Carson Group Chief Market Strategist Ryan Detrick: "The Fed did not make a fuss, cutting rates by the widely expected 25 basis points, while also opening the door for another rate cut in December. Chairman Powell acknowledged the potential issues regarding inflation, but the weakness in the labor market outweighed these concerns, leading to this rate cut and possible future actions."

Oxford Economics US Deputy Chief Economist Michael Pearce: "The decision to cut rates by 25 basis points in October was unsurprising, but a regional Fed president's unexpected hawkish dissent highlights that future actions are becoming more contentious. We expect the Fed to slow the pace of rate cuts from here. Our view is based on the judgment that the labor market conditions will stabilize, but it is challenging to assert this with the lack of official data."