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The inflation data was unexpectedly bad, despite the recent rate hike there’s no sign of the economy cooling down. So folks are expecting fed rates to get to as

The inflation data was unexpectedly bad, despite the recent rate hike there’s no sign of the economy cooling down. So folks are expecting fed rates to get to as high as 5%. Naturally all other financial markets are adjusting sharply to this. In crypto, get-rich-quick schemes will be the first ones to fall. Fed folks changed their stance from “soft” landing to “softish”, meaning they are falling short of calling for recession. Next 18 months are going to get very bumpy.

rvz 4y ago
Certainly. The time to prepare for this was in November - December 2021. [0] When the market euphoria was going close to its peak of peaks. Look at the responses then in [0]: 'Stock market up 1% today' on a daily chart. When I said it already started months ago [1], some point to data about the Fed 'official' announcements of being in (and defining) a recession and even still boldly suggesting afterwards: 'We are most certainly not in a recession.' This is how the 99% think. The problem is as with many of the commenters at the time still failed to understand is, you never, never, NEVER wait for the news to come out to prepare then or look at 'daily charts'. You must prepare and expect for anything unexpected in the long term in advance, such as months or a year for events just like this. Uncertainty is frowned upon, especially when it is prolonged. [0] https://news.ycombinator.com/item?id=29508238 https://news.ycombinator.com/item?id=29508238 [1] https://news.ycombinator.com/item?id=31441710 https://news.ycombinator.com/item?id=31441710
- deleted 4y ago
  [deleted]
- joosters 4y ago
  When the market euphoria was going close to its peak of peaks You only know it was a peak after it peaks. So your advice just boils down to 'sell before the price goes down'. What an insight!
  - piva00 4y ago
    It definitely sounded like a "you just need to be right when timing the market!" advice.
    - rvz 4y ago
      Or simply that hype, euphoria and low interest rates will not last forever. And this was essentially announced years ago in advance of the interest rates now being raised.
  - rvz 4y ago
    > You only know it was a peak after it peaks. So your advice just boils down to 'sell before the price goes down'. What an insight! Ah yes. You're reminding me about the warning I gave when stocks like $NET were going all the way up and I questioned others 'buying' / 'holding' it at the top and never selling, during the same period of euphoria at the time. [0] You can look at the responses yourself. It is no different to those who I questioned why many bought Bitcoin at >$60K at the time, even when it reached back up again. [1] Seems expected in advance to the entire market correcting. Great insight of mine not to join the 99% or wait months for a 'formal' announcement or data and then 'prepare' months afterwards. [0] https://news.ycombinator.com/item?id=29355360 https://news.ycombinator.com/item?id=29355360 [1] https://news.ycombinator.com/item?id=27206314 https://news.ycombinator.com/item?id=27206314
boc 4y ago
Counter-point is that the accepted history of the Volker interest rate hike might be bad economics, and that it was actually the oil price reductions that happened simultaneously which caused disinflation. If the Fed's research behind the scenes is convinced that this is the case, they might run rates dovishly and hope for KSA to save the day. Energy price shocks ripple across every part of the economy at high speeds, causing inflation in unexpected places. Point is that there's an outside chance that aggressive interest rate hikes are deemed unnecessary when combatting inflation.
- vishnugupta 4y ago
  Funnily almost exactly a year ago I was feeling uneasy about the whole frothy job market and was looking around for signals to locate the moment in a business cycle. Back then [1], Fed was signalling that they'd begin rate hikes by 2023. Hindsight; fed acted couple of quarters too late IMO. They completely evaded or invented new ways ("transitory") to describe scorching inflation as early as one year ago that was experienced by people on ground. And when the data came in around Nov 2021 they began to be getting their acts together but by then it was way too late. Though I agree with you; it's not straightforward. No one expected Putin to invade Ukraine, so there's that. But the signs of fed rate hike was clear IMO. If one wanted to be prepared and forego some of the profit they had about an year to prepare. [1] https://www.aljazeera.com/economy/2021/6/16/federal-reserve-raises-inflation-expectations-mulls-2023-liftoff https://www.aljazeera.com/economy/2021/6/16/federal-reserve-...
- paganel 4y ago
  > and that it was actually the oil price reductions that happened simultaneously which caused disinflation. Hopefully the powers that be also know that, hence Biden's planned visit to Saudi Arabia [1], plus the NATO secretary general saying this weekend that "peace is possible" in Ukraine, certainly a different mindset than the one present among most of the Western leaders about two months ago (when going all in in order to get Putin down was presented as a plausible solution). We'll see what the future will bring. [1] https://www.wsj.com/articles/white-house-set-to-announce-biden-trip-to-saudi-arabia-soon-11654997595 https://www.wsj.com/articles/white-house-set-to-announce-bid... [2] https://www.youtube.com/watch?v=KUGY692OT6g https://www.youtube.com/watch?v=KUGY692OT6g (the quote I mentioned is made at the start of the video)

rvz 4y ago

Certainly. The time to prepare for this was in November - December 2021. [0] When the market euphoria was going close to its peak of peaks. Look at the responses then in [0]: 'Stock market up 1% today' on a daily chart. When I said it already started months ago [1], some point to data about the Fed 'official' announcements of being in (and defining) a recession and even still boldly suggesting afterwards: 'We are most certainly not in a recession.' This is how the 99% think. The problem is as with many of the commenters at the time still failed to understand is, you never, never, NEVER wait for the news to come out to prepare then or look at 'daily charts'. You must prepare and expect for anything unexpected in the long term in advance, such as months or a year for events just like this. Uncertainty is frowned upon, especially when it is prolonged. [0] https://news.ycombinator.com/item?id=29508238 https://news.ycombinator.com/item?id=29508238 [1] https://news.ycombinator.com/item?id=31441710 https://news.ycombinator.com/item?id=31441710

deleted 4y ago
[deleted]
joosters 4y ago
When the market euphoria was going close to its peak of peaks You only know it was a peak after it peaks. So your advice just boils down to 'sell before the price goes down'. What an insight!
- piva00 4y ago
  It definitely sounded like a "you just need to be right when timing the market!" advice.
  - rvz 4y ago
    Or simply that hype, euphoria and low interest rates will not last forever. And this was essentially announced years ago in advance of the interest rates now being raised.
- rvz 4y ago
  > You only know it was a peak after it peaks. So your advice just boils down to 'sell before the price goes down'. What an insight! Ah yes. You're reminding me about the warning I gave when stocks like $NET were going all the way up and I questioned others 'buying' / 'holding' it at the top and never selling, during the same period of euphoria at the time. [0] You can look at the responses yourself. It is no different to those who I questioned why many bought Bitcoin at >$60K at the time, even when it reached back up again. [1] Seems expected in advance to the entire market correcting. Great insight of mine not to join the 99% or wait months for a 'formal' announcement or data and then 'prepare' months afterwards. [0] https://news.ycombinator.com/item?id=29355360 https://news.ycombinator.com/item?id=29355360 [1] https://news.ycombinator.com/item?id=27206314 https://news.ycombinator.com/item?id=27206314

boc 4y ago

Counter-point is that the accepted history of the Volker interest rate hike might be bad economics, and that it was actually the oil price reductions that happened simultaneously which caused disinflation. If the Fed's research behind the scenes is convinced that this is the case, they might run rates dovishly and hope for KSA to save the day. Energy price shocks ripple across every part of the economy at high speeds, causing inflation in unexpected places. Point is that there's an outside chance that aggressive interest rate hikes are deemed unnecessary when combatting inflation.

vishnugupta 4y ago
Funnily almost exactly a year ago I was feeling uneasy about the whole frothy job market and was looking around for signals to locate the moment in a business cycle. Back then [1], Fed was signalling that they'd begin rate hikes by 2023. Hindsight; fed acted couple of quarters too late IMO. They completely evaded or invented new ways ("transitory") to describe scorching inflation as early as one year ago that was experienced by people on ground. And when the data came in around Nov 2021 they began to be getting their acts together but by then it was way too late. Though I agree with you; it's not straightforward. No one expected Putin to invade Ukraine, so there's that. But the signs of fed rate hike was clear IMO. If one wanted to be prepared and forego some of the profit they had about an year to prepare. [1] https://www.aljazeera.com/economy/2021/6/16/federal-reserve-raises-inflation-expectations-mulls-2023-liftoff https://www.aljazeera.com/economy/2021/6/16/federal-reserve-...
paganel 4y ago
> and that it was actually the oil price reductions that happened simultaneously which caused disinflation. Hopefully the powers that be also know that, hence Biden's planned visit to Saudi Arabia [1], plus the NATO secretary general saying this weekend that "peace is possible" in Ukraine, certainly a different mindset than the one present among most of the Western leaders about two months ago (when going all in in order to get Putin down was presented as a plausible solution). We'll see what the future will bring. [1] https://www.wsj.com/articles/white-house-set-to-announce-biden-trip-to-saudi-arabia-soon-11654997595 https://www.wsj.com/articles/white-house-set-to-announce-bid... [2] https://www.youtube.com/watch?v=KUGY692OT6g https://www.youtube.com/watch?v=KUGY692OT6g (the quote I mentioned is made at the start of the video)