Jerome Powell needs to go

I am an ex-financial journalist who left to go into investment banking (I'm now semi-retired), so I have real world experience in both aspects of financial markets. None of this has made me qualified to question Powell or the FOMC's rate hike moves, but it makes me very qualified to make the criticism I am about to make.

The FOMC release, the rate hike trajectory, and the language in the prepared remarks were all fine and, I'd say, indications of competence and excellence (you can disagree with me on this; none of this is the point of this post).

However, there was one moment in the press conference that is absolutely an impeachable offense: Powell misspoke.

Listen to Lisa Abramowicz's respond to what happened: https://twitter.com/markets/status/1587888520290787328. She is absolutely right; his response was downright weird and not at all what a competent FOMC chair would do.

Now, the reason why this is so egregious is not something most people would think of, but those of us journalists and ex-journalists will: the reporters in that room suddenly have absolutely massive power over global markets.

By asking directly how Powell felt about the markets rallying (which they were not at the time), that reporter opened up a huge opportunity to move the markets. That's no big deal–reporters try to do that all the time–but the FOMC Chair's job is to not take the bait. He did, and his response was both tonally at odds with the FOMC statement but also substantially off script. The Fed chairperson is supposed to be better than this.

Now, I don't think Powell intentionally meant to do this–to be clear, I think it is absolutely an accident. And I don't think the reporter was trying to personally profit off of the situation. However, now the post FOMC conferences are now a bigger opportunity for financial journalists to try to make some quick cash than ever before–or at least in the 15ish years I've been following FOMC conferences.

Now if you're a reporter in the room, all you have to do is this:

1. Buy puts/calls.
2. Raise your hand.
3. Say the markets are happy/sad at what you did, is that good/bad?
4. Sell your puts/calls.

I do not think there's any malfeasance in the disaster that happened in that press room, but if Powell and the Fed aren't talking a long hard look at what happened then and what he did wrong, then Powell absolutely has to go. This was the biggest act of sheer incompetence directly attributable to Powell (or any Fed chair) that I've seen in my professional career.