Powell’s First Day

Jerome Powell was sworn in as Chairman of the Federal Reserve yesterday. If one were to say it was a sea change, they may be able to back up that charge with some evidence. The S&P 500 fell 4.1% during trading hours during Powell’s first day on the job. For a non-PhD economist to be running the Fed while volatility finally comes back to life is likely a coincidence, but a unique occurrence.

Why, for instance, would the market want to throw all of this at him on his first day? What would cause everyone to wait until the dove of all doves put in her has minute? Is this a test to Powell or was it a courtesy to Yellen knowing she wouldn’t be able to finish whatever she started?

In any case, the stock market has finally experienced a correction – one that many managers have been begging for. According to the index futures the market is implied to open down three plus percent. If momentum is still to be the ruling party of the day, this could continue and the message will be sent, “what goes around, comes around.”

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