In financial history, there is an enduring irony: markets and governments alike are interpreters of ambiguous texts. One has central bank speeches that could rival Talmudic commentary in their opacity, and the other has fiscal projections that make fortune tellers look humble.The last few days offered a perfect case study. Jerome Powell, the chair of the Federal Reserve, gave a carefully hedged speech about inflation, rates, and the Fed’s enduring “data-dependence.” Within hours, US stock indexes soared to record highs as if Powell had sworn an oath on Wall Street’s altar: thou shalt cut rates soon, and may profits flow eternal.
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