If they cycle guys are correct, inflation is going MUCH HIGHER... AND SOON! If so, JPows nuts will be in a vise.
You want rate cuts?? Well as markets fall your wishes are coming true!!
- Thread starter S2007S
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If they cycle guys are correct, inflation is going MUCH HIGHER... AND SOON! If so, JPows nuts will be in a vise.
Agree any uptick and powell is done.
If ifffff the so called recession shows up then he may just get lucky as the slow down creates a calming on the over all.economy. but I will almost guarantee that a falling equity market will dictate the fed movement on rates well before any economic date ....they need to keep stocks propped up. I mean the entire sell off after the pandemic lasted only months so if anyone is afraid of a small 30% drop over the next few months then they shouldn't be in the markets.
Also.remembee what the pros say.
Election years equal nothing but green!!
JPow has tried to dance the fine line between "soft landing and inflation". IMV, not possible. Can't have it both ways. Which he gonna choose? Whichever, lots of people will hate it.
Exactly like every 3rd word central bank. It is very suitable for a country fading into 3rd world status with an unstable currency and bailous for the masses.
My question will always be how long ...how many years do we look back and say that was the soft landing....I have heard about this soft landing for years, when does this damn thing actually unfold?
You think the reaction to earnings and a weak NFP is an inflation scare? This is a growth scare. The Fed is so far behind the curve.
They should've done a rate cut this Wednesday to keep the market steady instead of waiting. The market is like a baby. If you don't give it something it will be constantly crying but if you give it too much, it won't be able to take it. So you just give it something small, a small pacifier would do and one rate cut this year would've been this small pacifier and it can actually last quite some time provided you give it early not wait until it's really crying its guts out then you would actually need to feed it or change its diaper. Three rate cuts would be too much, the baby wouldn't be able to take it and it would be over-stimulating the economy.
Lessons learned from lots of babysitting
I think Powell might be looking at the PPI numbers. Even though the CPI numbers are dropping, the PPI numbers are still rising and since they are the prices paid by the sellers and they are still rising eventually they are to going to make their way into consumer prices. But those prices are not going to go down by delaying rate cuts as those prices are affected by productivity. No matter how much you delay the rate cuts, if people would rather sit on their a$$ and not work the productivity would still not go up and the PPI would still be up but at the same time, you are hurting the businesses who can't invest and expand their operations and hurting the economy by delaying the rate cuts.
Since the largest component of the price is labour cost, the most effective way to cut inflation by increasing productivity is actually a direct cut in wages but introduce a bonus pay program nationwide where if their productivity, things they produced reaching certain standard of quality NOT how much the things that they sold for is increased to certain point, they get a bonus pay. This would help more to controlling and pushing down inflation than just keeping the interest rate high. At the same time, you would still need to cut the rate when necessary for the businesses to grow and let the economy grow.