JP Morgan has put out an interesting piece of analysis this week. The banks says that the Fed, and Chairman Jerome Powell in particular, have cost investors over $1 tn this year just through his statements. For some reason, the market particularly dislikes hearing Powell. On average, the market drops significantly (0.40% or more) when the Chairman speaks. Further, his remarks usually cause an intraday inflection point, which means he is actually the one moving the markets, it is not just bad timing. JP Morgan summarizes that “While we acknowledge that it is not possible to attribute the market impact of each speech with certainty, simple math indicates that about $1.5 trillion of U.S. equity market value was lost this year following these speeches”.
FINSUM: We do not think this is anything to do with Powell specifically. It is more just about being a Fed chairman during a rising rate era.