Blood Bath on Wall Street to End the Week

Apparently, the street was not at all thrilled with what Chairman Jerome Powell had to say at Jackson Hole earlier this morning. The Nasdaq fell almost 500 points, or 3.94%, while the S&P and the Dow plummeted 3.37% and 3.03%, respectively.

• JPow the hawk. Federal Reserve Chairman, Jerome Powell, made it quite clear, especially by referencing former Fed Chair Paul Volcker, that the Fed will not be loosening up monetary policy anytime soon. “The successful Volcker disinflation in the early 1980s followed multiple failed attempts to lower inflation over the previous 15 years. A lengthy period of very restrictive monetary policy was ultimately needed to stem the high inflation and start the process of getting inflation down to the low and stable levels that were the norm until the spring of last year. Our aim is to avoid that outcome by acting with resolve now.”

• Prices fall in July. There was some good news today as the Fed’s preferred inflation hedge PCE Index showed that prices fell slightly in July. The personal consumption expenditures price index showed a year-over-year rise of 6.3% in July, down from 6.8% in June. The reading fell 0.1% month over month.

Mortgage-backed securities fell under 100 to 99.97, the 10-year fell 3 basis points to 3.03%, and oil was up slightly to $93 dollars a barrel.