One of the Federal Reserve’s most telling statements about markets came from Chair Jerome Powell on June 15 when the central bank announced its biggest rate hike since 1994: “Over the course of this year, financial markets have responded and have generally shown that they understand the path we’re laying out.” When Powell said that, the S&P 500 had already fallen by more than 20% from its Jan. 4 high. In other words, Powell all but confirmed that the 2022 market rout was exactly what he and his colleagues wanted.
