Here's Why Stocks Tumbled During Powell's News Conference

The transcript discusses the market's reaction to the Federal Reserve's decision on the balance sheet, highlighting a downturn in yields and stocks. It analyzes Powell's press conference, noting the market's disappointment with the lack of flexibility and empathy from the Fed. The discussion also covers the Fed's strategy on policy and balance sheet management, emphasizing the balance sheet's role and the Fed's data-dependent approach.

What was the immediate market reaction to the Fed's announcement about the balance sheet?

• Yields rose, but stocks fell.

• Yields fell, and stocks fell.

• Yields and stocks rose significantly.

• There was no change in the market.

What were the markets expecting from the Fed during the press conference?

• A more flexible and empathetic approach.

• A decrease in the size of the balance sheet.

• A strict and unyielding policy.

• An increase in interest rates.

How did the Fed describe its policy approach during the press conference?

• As being entirely unpredictable.

• As being data-dependent.

• As being focused solely on interest rates.

• As being on a preset course.

What did the Fed indicate about the balance sheet runoff?

• It would be adjusted frequently.

• It was designed to be on autopilot.

• It would be increased significantly.

• It was not a priority for the Fed.

What is the Fed's challenge with using the balance sheet as a policy tool?

• They have complete control over it.

• They think it is unnecessary.

• They are unsure how to use it effectively.

• They believe it is too risky.