The Fed Is Too Hawkish

Stock prices were beat down today by three downbeat and hawkish Fed officials (Fed Governor Lisa Cook, San Francisco Fed President Mary Daly, and Atlanta’s Raphael Bostic). They all repeated the Fed's party line: Inflation is too high and the Fed must continue to raise interest rates to bring it down.

They reiterated what  Fed Chair Jerome Powell said at his September 21 presser. He mentioned the words “pain” or “painful” seven times. He did so in the context that bringing inflation down with tight monetary policy might cause a recession, but the pain will only be worse later if the Fed doesn’t step on the monetary brakes now. His other remarks were uniformly just as hawkish.