The first capitulation was Donald Trump's to Nancy Pelosi, the leader of the Democrat opposition in the House. This brought the government shutdown to an end and reduced the degree of uncertainty. Good news! The second came from Jerome Powell. Recently, investors were anxious that the Fed’s balance sheet might be shrunk to such an extent that it would asphyxiate the markets (which is highly debatable). The Fed's chairman must have feared that these concerns could trigger a financial shock. To prevent this, he opted to put monetary policy on hold for an extended period. Is this good news too? We are not so sure.

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A double capitulation