3 ms·

Funny that this would rocket to the front page so quickly. Shows where everyone's minds are at. A lot of folks were banking on a pivot by the fed but they fai

Funny that this would rocket to the front page so quickly. Shows where everyone's minds are at. A lot of folks were banking on a pivot by the fed but they failed to understand how seriously the fed now sees inflation. Sure, the fed could/should have raised even higher, but consider they need to orchestrate a less disruptive start to our next recession. They're still doing QT as well, which will also help tame inflation.

88913527 4y ago
The Fed does a very good job at setting market expectations. If it sees the market is mis-aligned with its thinking, it will use soft policy tools like interviews and public statements (outside of more formal options, like regularly scheduled official FOMC press releases) to bring the market to its expectations. Markets priced a greater than 3-in-4 chance of a 75 basis point increase, which was the decision: https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html https://www.cmegroup.com/trading/interest-rates/countdown-to... In the preceding weeks, especially after the latest inflation report came out, markets began pricing a ~90% chance of a 100 basis point increase. Then came out the interviews to steer markets back to 75.
aresant 4y ago
The stock market is usually the best indicator of investor sentiment - the consensus was a 75 bps increase, that's what the market got, and as a result the market sustained gains from today. https://finance.yahoo.com/news/stock-market-news-live-updates-july-27-2022-113235652.html https://finance.yahoo.com/news/stock-market-news-live-update...
- 01100011 4y ago
  We'll see where the market settles in a few days. I wouldn't read too much into today's price action. You're seeing a lot of options action in a low volume market. We're not even done with a big earnings week(cough, AAPL, cough).
bhahn 4y ago
> Funny that this would rocket to the front page so quickly. Shows where everyone's minds are at. I don't find this so surprising. Inflation (and rates as a consequence) has been affecting a good number of people directly or indirectly (cost of goods/gas, stocks, layoffs, etc).

88913527 4y ago

The Fed does a very good job at setting market expectations. If it sees the market is mis-aligned with its thinking, it will use soft policy tools like interviews and public statements (outside of more formal options, like regularly scheduled official FOMC press releases) to bring the market to its expectations. Markets priced a greater than 3-in-4 chance of a 75 basis point increase, which was the decision: https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html https://www.cmegroup.com/trading/interest-rates/countdown-to... In the preceding weeks, especially after the latest inflation report came out, markets began pricing a ~90% chance of a 100 basis point increase. Then came out the interviews to steer markets back to 75.

aresant 4y ago

The stock market is usually the best indicator of investor sentiment - the consensus was a 75 bps increase, that's what the market got, and as a result the market sustained gains from today. https://finance.yahoo.com/news/stock-market-news-live-updates-july-27-2022-113235652.html https://finance.yahoo.com/news/stock-market-news-live-update...

01100011 4y ago
We'll see where the market settles in a few days. I wouldn't read too much into today's price action. You're seeing a lot of options action in a low volume market. We're not even done with a big earnings week(cough, AAPL, cough).

bhahn 4y ago

> Funny that this would rocket to the front page so quickly. Shows where everyone's minds are at. I don't find this so surprising. Inflation (and rates as a consequence) has been affecting a good number of people directly or indirectly (cost of goods/gas, stocks, layoffs, etc).