Federal Reserve Chairman Jerome Powell yesterday did not use his Congressional testimony to walk back market expectations for easier policy. Instead, he effectively confirmed that the Fed intended to cut rates at the end of this month. The Fed is taking out insurance against increasing downside risks given that the cost of that insurance is cheap given low inflation. Eventually future rate cuts will have to be about the data not just the risks. Powell left little doubt about his policy intentions. Importantly, Powell said that the downside risks that had vexed the Fed at the June FOMC meeting had not waned. Those ... (full story)