When you state "His [Powell's] job got a whole lot tougher after yesterday’s number", I am curious what you mean by this? (Assuming it is not cutting rates in 2023.)
Nobody seems to be talking about the fact that even if inflation were to hit 1% by next October / November, that would still mean our prices are elevated. While cutting rates may be seen as a net benefit to the economy, it would not alleviate actual prices for consumers unless we start seeing deflation.
I was meaning that his job got tougher as the CPI print coming in lower made his reasoning that the Fed could continue to hike and not cut rates in 2023 a lot harder a job to convince the market than if the CPI report had been more in line with expectations.
As you can see the disconnect now between the market and the fed in terms of where they see rates at the end of next year has widened and this is the challenge for the Fed.
I think if we get 1% inflation by October that will mean that we are in the middle of a recession too so we would have bigger worries sadly
Excellent analysis of the Fed and J. Powell.
Great commentary on the World Cup...
Love to see Morocco beat the French and Messi to ultimately win his 1st WC.
That would be a Hollywood ending.
But I guess the French will likely spoil all that...
Thanks Steven for the kind words and your continued support
When you state "His [Powell's] job got a whole lot tougher after yesterday’s number", I am curious what you mean by this? (Assuming it is not cutting rates in 2023.)
Nobody seems to be talking about the fact that even if inflation were to hit 1% by next October / November, that would still mean our prices are elevated. While cutting rates may be seen as a net benefit to the economy, it would not alleviate actual prices for consumers unless we start seeing deflation.
Hi Kian
I was meaning that his job got tougher as the CPI print coming in lower made his reasoning that the Fed could continue to hike and not cut rates in 2023 a lot harder a job to convince the market than if the CPI report had been more in line with expectations.
As you can see the disconnect now between the market and the fed in terms of where they see rates at the end of next year has widened and this is the challenge for the Fed.
I think if we get 1% inflation by October that will mean that we are in the middle of a recession too so we would have bigger worries sadly
Thanks for the questions Kian
Got it thank you for the response. Really enjoy your commentary and the platform you have built at Harkster.
Thanks Kian