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Dovish Powell signals another raging bull market ahead

Almost everyone on Wall Street thought they knew exactly how yesterday would play out for the stock market.

But in reality, the exact opposite arrived. And therefore, it seems to have confirmed that the breakout in equities that we saw in early 2023 is the start of a new big bull market.

Yesterday Federal Reserve Board Chairman Jerome Powell gave a speech at the Economic Club of Washington.

The last time Powell spoke publicly was last Wednesday. At the time, he admitted that the “disinflation cycle had begun”. Those four words alone sparked a huge stock market rally in which the S&P500 increased by 4% in 24 hours.

It was one of the biggest and fastest rallies on Wall Street in the past 12 months..

And that means mega wins are on the way.

Bull market gains are coming

Powell does not live under a rock. Going into yesterday’s speech, he knew his words had sparked a huge stock market rally.

Throughout 2022, Powell has fended off stock market rallies. Every time the market roared after one of his speeches, he sounded deliberately hawkish in his next presser to subvert Wall Street’s hopes of a Fed pause or pivot.

Not this timeseemed to be his consistent message to the stock market in 2022.

Everyone expected him to send the same message yesterday, pushing back on his disinflation comments and sounding as hawkish as ever.

But he didn’t.

In fact, it was quite the opposite..

Powell didn’t just double down on his comments on disinflation; he started his whole speech by reiterating that the cycle of disinflation has begun.

Of course, he also said warmongering stuff. But it was planned.

The Jerome Powell that Wall Street has grown accustomed to over the past 12 months has been nothing but hawkish. But last week, the Dovish Powell began to reappear.

The market thought it saw a dovish Powell last Wednesday. That’s why stocks soared. But investors began to view this dovish attitude as a mistake by the Fed Chairman.

That’s why stocks fell ahead of yesterday’s speech.

SO… the Dovish Powell did another appearance.

Two Dovish sightings of Powell in one week? It is not a coincidence. It’s intentional.

Powell is bracing the stock market for a Fed pause on rate hikes over the next few months.

He also tells everyone that the equity bear market is over..

The last word

Fed breaks consistently trigger massive stock market rallies.

Simply put, every time the Fed has halted a rate hike campaign over the past 50 years, the stock market has skyrocketed.

Rallies are almost always above 20%!

A chart highlighting the relationship between Fed pivots and market rallies

In other words…

Fed pauses consistently trigger big stock market rallies, and Powell deliberately shifts his rhetoric and sentiment to signal that a Fed pause is imminent. And with it, a new bull market is also emerging.

No wonder the stock market is rallying like it’s 2021 again!

If you participate in the rally, congratulations. If not, it’s time to have some fun.

That’s because, believe it or not, this isn’t just any ordinary stock market breakout. Thanks to a rare stock market phenomenon we discovered last year, the 2023 stock market breakout could be one of the biggest ever.

Click here to find out why.

As of the date of publication, Luke Lango had (neither directly nor indirectly) any position in the securities mentioned in this article.


Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
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