12:09 p.m. The Dow Jones Industrial Average surged following a speech from Federal Reserve Chairman Jerome Powell, one the market is clearly taking as dovish.
In his speech, Powell said that interest rates are just below neutral, the point where they’d be neither accommodative or restrictive. That remark seems to be taken as far more dovish than his comments in October, when he said rates were far from neutral.
“The markets are latching on to two words in the Jay Powell speech, ‘just below’ referring to where he thinks the neutral rate is,” writes Bleakley Advisory Group’s Peter Boockvar. “We know that no one really knows what the neutral rate really is but ‘just below’ is different then what he said in October when he said ‘we’re a long way from neutral at this point, probably.’”
It was quite a move by stocks:
Now it just needs to hold.
Write to Ben Levisohn at [email protected]