Said another way, governments all over the world need to stop spending.The FED has two mandates: unemployment and price stability.
Thus, they can keep hiking if inflation doesn’t return to 2% so long as unemployment doesn’t go higher. Now the much bigger issue for the FED, who is going to buy bonds? The ECB and FED have been major buyers over the last ten years. If they aren’t buying, pension funds, private banks, mutual funds and foreign country central banks have to buy. Not sure they want to buy at less than 3% while the FED is raising rates above 5%. The 5% is overnight, 3% is ten year so the assumption is over 10 years rates end up below 3% and inflation under 2%.
and if we fall into a deeper depression, won't the fed cut interest rates?
Now I do believe they will slow the hikes or reduce the size. I also see them doing QE on the bond market.No. Focus on inflation, not on the unemployment rate. If inflation stays above 5%, I dont see them stopping.
Now I do believe they will slow the hikes or reduce the size. I also see them doing QE on the bond market.
or pause and eventually cut..2023. The Fed almost always overestimates, for fear of underestimating..Now I do believe they will slow the hikes or reduce the size. I also see them doing QE on the bond market.
We byke….
NP i've got a few more snippets to talk about in the coming days. Just wanted to throw this back on the radar before it runs up. Here's some of their more recent vids.
O&M - Connecting investors to undervalued public companies since 2002
O&M Presents 6 Minute CEO from the CEO to you. Condensing one-hour presentations into 6 minutes of actionable information.www.om-partners.com
Inflation is dropping regardless. The Fed has done enough damage to the economy. The sooner the market realizes it, the faster the recovery [market and economy].One huge factor that has helped "lower" inflation is the exceptionally strong $. With the ECB and UK raising sharply, and now finally Japan starting to raise, the US$ will weaken (look at Gold and Silver today), and will make the cost of imports go up, putting more pressure on inflation and the stock market.
Inflation is dropping regardless. The Fed has done enough damage to the economy. The sooner the market realizes it, the faster the recovery [market and economy].
In the meantime, I wouldn’t mind a little pop in gold.
Happy Chanukah…
May all your dreidels be filled with gold!
Does economic growth must be inflationary? Personal Consumption remained flat…"Good news is actually bad news", Fed needs to keep going.