Powell Spoke, A Bunch of People Misread an AI Headline, and Banks Exploded

Markets don’t crash or rally on truth. They move on perception and when Powell spoke at Jackson Hole, the machines didn’t hear him, they hallucinated. A Bloomberg AI summary blasted out a fake obituary for the Fed’s 2% target, algos ran with it, and the crowd (of algorithm traders) dutifully followed. In minutes, billions shifted hands.

But here’s the thing: Powell never buried 2%. He reaffirmed it. Which means the entire chain reaction, the bank rip and the sudden unwinding of crowded shorts like IWM - was a story of positioning, not fundamentals. That difference matters, because it tells you where the real money gets made in the next 18 months all behind the wall.