We're damned if they do and damned if they don't..................
Didn’t the Fed just say rate increases until March 2023?
We're damned if they do and damned if they don't..................
“‘They’ll chicken out’: Fund legend Rick Rule says the Fed won’t keep hiking rates aggressively to prevent ‘amazing damage.’”
No, they can’t prevent amazing damage. But they may be cowards who will kick the can down the road and let the damage keep accumulating.
They’re NOT gonna chicken out after ONE rate hike. History says they overshoot and cause non-trivial market damage. They are NOT GOOD at predicting. They are not even that good at seeing the damage they cause, then adjusting their thinking, maybe, and then possibly considering reversing course. They think they are the saviors of the world, it is only AFTER knocking down the economy that they POSSIBLY consider they might have been wrong or MIGHT have gone too far. Barring clear, observable, and sustained damage, they very slowly become open to the idea that they themselves may have caused same. They are no better at predicting things than anyone else. Absent any or all of those hiccups, they still think they are the experts, the saviors of the world. The LAST THING they will allow to enter their thinking is “MAYBE WE WERE WRONG”.
You can avoid reality all you want, but you can never avoid the consequences of avoiding reality.
There’s lots of lying balance sheets that could stand to have some amazing damage done to them.
Today is the end of the second quarter and the second consecutive quarter f a drop in th GDP groth rate. We will be declared to be in a formal recession.
The Fed knows of no other course but to raise interest rates, again
Stagnant economy, upward prices, uncurable economic turmoil.
An election might cure the market drop. It might improve the businessminds somewhat to see a glimmer at the end of a two year tunnel.
“it wouldn’t cure inflation until it did amazing damage to various balance sheets”
This is what their decisions are really about, protecting the “special” people and their balance sheets, versus stopping inflation from screwing over EVERY SINGLE PERSON in the country.
They said the same thing in the beginning of the Reagan era while Volker was chairman. He had to lick inflation by proving them wronng. The inflation remedy was painful for only a short time because the Carter/Reagan regulatory and tax reforms soon began to grow the economy back.
I am predicting two raises then a flip flop when chaos ensues.