Yield Rise Is Knee-Jerk Reaction to Fed: JPM's Michele

The transcript discusses the market's reaction to the reappointment of Powell and the appointment of Brainerd as vice chair, suggesting a moderate Fed approach with potential rate hikes. It examines whether there is mispricing in bond yields and concludes that the market expected these leadership decisions. The discussion highlights the positive impact on risk assets and equities, with a focus on the Fed's patient approach to normalizing policies.

What is the market's general expectation following Powell's reappointment?

• A decrease in interest rates

• A significant increase in interest rates

• A moderate approach with potential rate hikes

• Immediate normalization of monetary policy

What is considered a potential mispricing in the market?

• The two-year bond yield decreasing by 6 basis points

• The sudden drop in commodity prices

• The stock market's rapid decline

• The five-year bond yield reaching nearly 1.3%

What is the market's central expectation regarding Powell's reappointment?

• Immediate rate cuts

• Brainerd as vice chair and a dovish package

• A complete overhaul of the Fed's policies

• A hawkish approach from the Fed

How are risk assets performing according to the discussion?

• They are stagnant

• They are performing well

• They are underperforming

• They are highly volatile

What is the Fed's approach to normalization as discussed?

• Aggressive and immediate

• Patient and tentative

• Indifferent and passive

• Unpredictable and erratic