What you're not hearing about Jay Powell and controlling the yield curve

Powell's silly gaffe about bond market disorder was just a flub, and isn't responsible for the big risk-off reaction. Markets were looking for assurances that the Fed will cap long-term yields, and Powell didn't give any. That is not a policy error like 2018's "automatic pilot." There is no threat from higher yields, no dysfunction. Besides, the Fed has never been able to effectively control yields, demonstrated by the reality that yields rose in all four QE episodes, and fell during normalization. Rising yields are a sign of growth, to be welcomed, not feared.