Powell Sounds Even More Dovish On Interest Rates But Market Shrugs

In the second day of his semi-annual testimony to Congress–this time in front of the Senate–Federal Reserve chairman Jerome Powell sounded even more likely to support an interest rate cut at the central bank’s July meeting. The Fed has room to cut rates, he said, and the Fed may have erred  in keeping monetary policy too tight. But financial markets didn’t move much in reaction. Which makes sense if you note that the odds of an interest rate cut according to the CME FedWatch Tool, were at 100% yesterday. No way to go higher than that. The odds remained at 100% today.