Hawkish Harker, George Bundesbank Comments, Fed Minutes Spill Stocks

Coincidence?

Just about the same time Germany's Bundesbank put the kibosh on stimulus, Philadelphia Fed President, Patrick Harker, and later, KC President, Esther George, indicated they would not be supportive of future rate cuts.

Notably, though Harker is not a voting FOMC member, there was a supposed "gag order" on Fed officials issued recently by Fed Chairman, Jay Powell. Apparently, not everybody got the memo, or, with Powell's Friday morning Jackson Hole speech in focus, it's open season on interest rate jawboning.

The hawkish commentary sent the two-year note soaring, plunging in yield below the 10-year. Inversion, again.

Later in the trading day, the Fed minutes from the July meeting were released, with a number of officials calling the 25 basis point rate cut a "mid-cycle adjustment," a laughable notion in the face of an expansion that has exceeded all others in US history, at 10 years, five months, and counting.

Since central bank commentary and interest rate movement in the bond market is just about the only thing Wall Street currently cares about, stocks sold off in afternoon trading.

We have entered bizarro-world.

At the Close, Thursday, August 22, 2019:
Dow Jones Industrial Average: 26,252.24, +49.51 (+0.19%)
NASDAQ: 7,991.39, -28.82 (-0.36%)
S&P 500: 2,922.95, -1.48 (-0.05%)
NYSE Composite: 12,688.46, -8.55 (-0.07%)