Current market assumptions: 1. Inflation peaked at 9.1% in J...
Current market assumptions:
1. Inflation peaked at 9.1% in June 2022
2. Fed will start cutting rates this year
3. Inflation is heading in a straight line lower
4. Soft landing is still a possibility
5. Unemployment is contained
What happens if one of these don’t come true?
1. Inflation peaked at 9.1% in June 2022
2. Fed will start cutting rates this year
3. Inflation is heading in a straight line lower
4. Soft landing is still a possibility
5. Unemployment is contained
What happens if one of these don’t come true?
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Lovely_Moo : We are screwed
sTone83 : 3- It won't be a straight line; there will be bands.
Steak Eater : To maintain all this factors throughout 2023 is a tall order. What's more is that they already hit the debt ceiling since 17th Jan and is using pension funds/benefit plans to fund their civil service operations. We all know the printing machine have to be used but the current obstacle is the scary impact it will have on the already high engineered inflation.
Now they are faced with the problem of destroying inflation by June to activate their printing machine or just default on their obligations and risk high borrowing rate in a already low liquidity environment. Uncle Powell may be sweating buckets and giving serious consideration to stop giving cutesy jab to the interest rate in the name of a soft landing
PolyQ : If you are a living person you know the inflation is not contained . the formula was modified to produce the rosy data. If you are a wise person you know Fed can not elevate the rate much as the interest of US national debt will crush the whole country.
intuitive Jackal_354 : I garrantee half won't come true. the markets are trying to manipulate the fed, and the fed will give them a bid sting back