Hawkish FedSpeak Slams Stocks Into The Red

Third time was the charm today for Fed speakers as first Mary Daly, then Charlie Evans and finally Loretta Mester stomped on the neck of the idea of Fed Pivot…

SF Fed’s Mary Daly jawboned the doves back by stating that The Fed is “nowhere near done” on fighting inflation, adding that “we have made a good start, and I feel really pleased with where we’ve gotten to by this point,” but inflation is “far too high.”

“It really would be premature to unwind all of that and say the job is done,” she said. “I also think that we’ve been with this high inflation for a while, and really getting too confident that we’ve already solved the problem,” Daly said, adding that the Fed needs to “keep committed until we actually see it in the data.”  

Chicago Fed President Charles Evans said he is hopeful that reaching 3.5% by the end of the year is “still reasonable.”

“I think that there’s enough time to play out that 50 is a reasonable assessment, but 75 could also be okay” at the September meeting, he said. “I doubt that more would be called for” at that meeting, Evans added. But, Evans warned that “if we don’t see improvement before too long, we might have to rethink the path a little bit higher.”

Cleveland Fed’s Loretta Mester said she saw “no signs of a recession” offering no dovish pivot signal by noting that “we have to get inflation under control.”

To really drive the point home, Mester concluded that she “hasn’t seen anything suggesting inflation is leveling off.”

It wasn’t until Mester’s words that stocks paid attention, puking back all the “well, China didn’t invade” relief rally…

Notably Treasury yields…

…and rate-trajectory expectations were both soaring as stocks rose (and have continued to since stocks faded).

Is the exuberant short-squeeze over?

Notably, some desks are pointing an announcement from China’s CATL (Contemporary Amperex Technology Co. Ltd) which sent SOX tumbling…

The world’s biggest maker of batteries for electric vehiclesdecided to push back announcing a multibillion-dollar North American plant to supply Tesla Inc. and Ford Motor Co. due to tensions raised by House Speaker Nancy Pelosi’s trip to Taiwan, according to people familiar with the matter.