Some said the Fed was going to pivot soon but... The Taylor Rule indicates rates need to go to 8% plus
The new Taylor Rule based on Swiftie ticket prices.
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Some said the Fed was going to pivot soon but... The Taylor Rule indicates rates need to go to 8% plus
The new Taylor Rule based on Swiftie ticket prices.
Looks like Bond market is becoming more and more sure of impending recession with 10 Y Yield dropping like stone ....with Yield Curve most Inverted in 40 years !!
FED will surely make note of that ...chances are getting more towards 50bps Dec move as we move more higher above neutral rates ...
Eventually all including FED will realise that times of 5% rates are long gone ...so much debt fuelled growth / living these days ...makes everything supersensitive to higher rates ...average debt per person in developed world is rising day by day ...thus making him more vulnerable to higher rates so it takes smaller and smaller hikes to bring him to his knees
SF Fed's views seems pretty spot on to me ...it states that 50% of US inflation is supply side , 30% Demand side and 20% unknown factors ...
With Global rates rising leading to not only Global demand reduction but thus easing supply side constraints too thus Inflation is getting tackled on two fronts ...Why this Inflation became too hot so fast maybe due to the fact that with supply side badly constrained it cud not handle even small demand increases
But similarly it shud fall off equally fast if above was real reasons for such sharp spike in inflation ....we will know for sure in next 6 months till then its a mystery and markets will keep guessing its outcome ...but if it happens like some expect ie fall off as fast as it ran up then markets will rejoice big time in second half 2023 otherwise it will keep sulking but still not fall of a cliff ...I reckon
Other's view is Inflation will stay with us longer thus rates will keep up longer thus stocks will languish rangebound for longer
Either way Central Banks will go for Overkill as thats the Only remedy which has proved to be best strategy vs inflation in the past ...half measures dont work
So expecting rates being increased at PACE worldwide ...NZ will do the same ...75 bps actually makes sense for Wednesday and another 75 in Feb then hold tight as ANZ is advocating ...
If we shareholders are lucky then we will see Inflation falling very fast from Q3 ...fingers crossed ....dont fear the mild recession ...most good companies will cope better than we expect as it will reduce labour related problems in a big way without actually killing demand big time
Why one shouldn't watch too much CNBC (and other media) - it makes out things are bad, really bad, when in reality things are pretty good
Kike this from a commentator in US - Its very odd because inflation is crazy, housing is collapsing, stocks and bonds down, credit card debt setting records... yet every store, hotel and restaurant packed to the gills. Airport packed, etc
a few guru's out there on the world stage now saying disinflation is coming. apparently we are not in a secular inflation trend.
fed pivot cant be far away then.
gosh i cant keep up. thinking of just selling up the portfolio and going equal portions FPH, MFT, EBO, SUM, BRM, MLN, IFT and check back in 10 years when the kids are older