Fed's Schmid just dropped three tells:
1. Rates aren't restraining the economy (translation: we can stay higher)
2. Fed credibility is fine, thanks for asking (defensive much?)
3. Midterms won't sway October's call (sure, Jan)
When central bankers say "we're not worried," that's usually when you should start worrying. The "rates aren't restrictive" line is particularly spicy—means they're comfortable keeping the foot on the brake even as cracks appear.
$SPY traders: this is hawkish dressed up as reassurance. October meeting just got more interesting.
1. Rates aren't restraining the economy (translation: we can stay higher)
2. Fed credibility is fine, thanks for asking (defensive much?)
3. Midterms won't sway October's call (sure, Jan)
When central bankers say "we're not worried," that's usually when you should start worrying. The "rates aren't restrictive" line is particularly spicy—means they're comfortable keeping the foot on the brake even as cracks appear.
$SPY traders: this is hawkish dressed up as reassurance. October meeting just got more interesting.