Fed chair Jerome Powell shows the market who’s in charge

Federal Reserve chair Jerome Powell has been roundly criticized by President Donald Trump for not cutting rates fast enough and by investors for possibly ignoring signs of a slowdown. Here’s a hot take for you: Powell is actually doing a good job.

Krishna Memani, vice chairman of investments at Invesco, gives rave reviews to Powell for how he handled questions in his last press conference in mid-September. The Fed cut rates again, as expected. But that wasn’t the real story.

Unlike Powell’s press conference in late July, where he flubbed a question about the possibility of more rate cuts with the now infamous “midcycle adjustment to policy” phrase, Powell deftly avoided giving the markets a firm commitment about what might be next — and did so in a way that didn’t spook Wall Street.

Powell learning the art of speaking in Fed code

“It is remarkable that Powell didn’t give anything away and thus preserved the operating flexibility of the Fed, something neither he nor previous Fed Chairs Janet Yellen and Ben Bernanke for that matter, were able to do,” Memani wrote in a recent blog post.

“Powell effectively bought himself and the Fed some time. Despite the ingrained marked expectations, the path to the Fed moves is not predetermined, for the first time in a while, and the path remains data dependent.”

Investors seem okay with that too. Although stocks have been relatively flat since the last Fed meeting, that has more to do with concerns about an escalation of trade tension with China than anything Powell said (or didn’t say.)

In other words, Memani thinks Powell avoided doing anything that would get “the market in a tizzy.”

“A few more performances like this and we will stop missing his illustrious predecessors,” Memani added. “In the end, Powell refrained from being his own worst enemy.”

Memani will be talking about this with CNN Business editor-at-large Richard Quest on the next “Markets Now” live show, which will stream on Wednesday at 12:45 pm ET.

Invesco is the sponsor of this show. But Memani’s appearance is independent of that sponsorship. CNN Business books a wide variety of guests on this show from many banks and investment companies.

Not sweating repo madness or negative rates

It’s a lively time for market commentators. There’s the chaos in the overnight lending repo market, investors’ shift away from growth sectors like tech toward value stocks, and negative interest rates.

Memani’s contrarian advice on repos? “It is sausage making in the extreme, and you are better off not knowing all the details,” he said in a recent blog post.

It’s also too soon to give up on growth, he thinks, noting in a blog post that “this market rotation will prove to be as ephemeral as similar moves since the end of the financial crisis were.”

And he believes investors should calm down about rates below zero in Europe. “Cut the central bankers some slack. They are trying to do a very suboptimal thing but that is the only tool they have available,” he wrote in another post.

“Markets Now” streams live from the New York Stock Exchange every Wednesday at 12:45 pm ET. Hosted by CNN Business correspondents, the 15-minute program features incisive commentary from experts.

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