I have a theory that Fed governors “create” volatility for fun. Clarida wakes up thinking “hmm market has been going up for some time…would be a shame if rate rhetorical shifted hawkish…”
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What is the fed going to do about inflation?
- Thread starter gunner_trader
- Start date
In the last tightening cycle, the Fed implied there was a lot of room to go higher with FFR at 2%+. That caused a recession in manufacturing (and a correction in most stocks ex-FANG).Not really. If a lot of people have cash in the bank, 0.5% to 1% rate increase does not do a thing. People do not travel, much, do not go to malls, restaurants, bars outdoor activities much. Not a lot people and businesses borrow money now. This will only impact the speculative purchases somehow. Like crypto, MEME, tech stocks and houses.
I have a theory that Fed governors “create” volatility for fun. Clarida wakes up thinking “hmm market has been going up for some time…would be a shame if rate rhetorical shifted hawkish…”
They won't do it anymore since they are no longer allowed to actively trade stocks. Maybe they will crash the markets as revenge.
What time period are you referring to, Q4 2018?In the last tightening cycle, the Fed implied there was a lot of room to go higher with FFR at 2%+. That caused a recession in manufacturing (and a correction in most stocks ex-FANG).
Then, the world as we know it would end.Technically, the Fed could quickly tighten money which would lower demand. But that would also create a recession.
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Now, what can cause recession if US factories can't even high enough workers?
This is not that economy is over-heating. Fed can't crank enough socks from US factories and can't pump enough crude oil or gasoline to lower energy prices.
Well, considering the US imports 80% of everything we use...it is out of our hands...and that IS the crux of the whole problem. When you import everything and demand soars, you are at the mercy of the suppliers. Its a very fcked up place to be. Not many other countries in the world are quite so dependent on imports and have so very few actual manufacturing workers in place. And now, even our service workers are demanding higher and higher wages and stepping out of the job market until they get something they like. US production supply and services charts look just like ARKK. US demand and wages charts look just like SARK.
If John Maynard Keynes saw the predicament the US was in right now, he would bug out completely.
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That scenario and socialism has resulted in starvation in VenezuelaWell, considering the US imports 80% of everything we use...it is out of our hands...and that IS the crux of the whole problem. When you important everything and demand soars, you are at the mercy of the suppliers.
I think so. That's when Powell said he would raise rates on "autopilot" and then the QQQ dropped 20% from 12/3/18 to 12/24/18. The industrials already rolled over in October.What time period are you referring to, Q4 2018?
The expectation the market has of fed action is useless. What is useful is the reaction the market has to fed action.You said coin flipping was better than watching the fed lol. I disagree. You implied that watching the fed it means taking their word as fact. I disagree. I am saying it is better to look at what the fed is saying relative to the expectations the market has of fed action. You seem to disagree. That’s fine and is your prerogative.