More On The Return Of The Fed Put

Reading between the lines of Fed Chair Powell’s recent press conference, he seems to be reassuring financial markets that the Fed has their backs. We see that in his emphasis that labor market weakness—should it unexpectedly arise—could warrant monetary easing; inflation isn’t the only economic variable that could do so. His repeated mention of unexpected labor market weakness that would require a policy response, even while characterizing the labor market as robust with no sign of such weakness, seems to us code for: “The Fed Put Is Back.”