Delta 100 : cpi + 4% my portfolio + 400% its ok, next year cpi + 40% my port + 999999999%

Minerva2 : you are really good at story telling. if the new Fed chairman will shrink the fed balance sheet, the long term interest rate will hike, it will shock the housing market with house price going down. I read the headline and core cpi positively. with such big oil price hike, the impact is not that big.

ProfitByFriday com OP Delta 100 : Wishing you the best ahead.

ProfitByFriday com OP Minerva2 : You are right about the oil distortion. Core at 2.8% with Brent above $107 is actually a contained print when you think about it. The housing shock scenario is real but the timing depends entirely on pace. Warsh said explicitly at his Senate hearing that balance sheet reduction needs full FOMC majority and will take years. The more interesting angle he floated is running both simultaneously: shrink the balance sheet slowly to reduce long-term inflation pressure, then use that as justification to cut short rates. If that works, the 10-year stays range-bound and mortgage rates come down rather than up. The shock only happens if he moves too fast, and everything he has said publicly suggests he will not.