4 ms·

There's no reason to have any narrative other than the Fed raising rates. If you've watched with absolute astonishment how despite the COVID crisis the stock m

There's no reason to have any narrative other than the Fed raising rates. If you've watched with absolute astonishment how despite the COVID crisis the stock market kept on climbing because of the Fed printing press, then you'll learn the lesson never to fight the Fed. Now the directions are reversed. If the Fed could pump the stock market despite the worst economic doom and gloom, when the Fed raises rates this high into a powder keg, I expect to be surprised even more. I wasn't surprised yet. We're not even at the same peak level of interest rates of the 2008 recession, and we're still in high inflation. I think companies are starting to dread the depth of the incoming recession.

arcticbull 4y ago
> ...and we're still in high inflation. This actually isn't true. On a month-over-month basis CPI was negative. If you look at the three-month moving average, it's pretty clear the inflation crisis is over at least for now. The annual 6% number or whatever is the wrong thing to look at, look at month over month numbers. The Fed's goal isn't to zero out the price growth before throwing in the towel. Their goal is to bring annualized month over month numbers back in line with their historical 2% target on a forward-looking basis. It's very unlikely we'll deflate back to pre-crisis pricing unless the Fed makes a big mistake. > I think companies are starting to dread the depth of the incoming recession. For what it's worth, we're not seeing one yet. It may happen, I guess, but so far the numbers all look quite good. That said, expectations in this regard tend to become self-fulfilling.
- Panzer04 4y ago
  Hopefully we can buck that - things have been going swimmingly for the better part of a year despite said recession expectations. At this point I feel like we may well get the best of all worlds - inflation dealt with, roaring economy, recession averted. We even still have a fairly tight labor market pushing up wages a bit.
  - arcticbull 4y ago
    Yup, the 'soft landing' narrative we put to bed 6 months ago or so seems to be making a comeback. Fingers crossed.
  - Yoric 4y ago
    You're speaking about US. The rest of the world is still quite shaky. And everybody is looking towards China reopening and wondering how that economy will fare in the post-zero-Covid-policy world.

arcticbull 4y ago

> ...and we're still in high inflation. This actually isn't true. On a month-over-month basis CPI was negative. If you look at the three-month moving average, it's pretty clear the inflation crisis is over at least for now. The annual 6% number or whatever is the wrong thing to look at, look at month over month numbers. The Fed's goal isn't to zero out the price growth before throwing in the towel. Their goal is to bring annualized month over month numbers back in line with their historical 2% target on a forward-looking basis. It's very unlikely we'll deflate back to pre-crisis pricing unless the Fed makes a big mistake. > I think companies are starting to dread the depth of the incoming recession. For what it's worth, we're not seeing one yet. It may happen, I guess, but so far the numbers all look quite good. That said, expectations in this regard tend to become self-fulfilling.

Panzer04 4y ago
Hopefully we can buck that - things have been going swimmingly for the better part of a year despite said recession expectations. At this point I feel like we may well get the best of all worlds - inflation dealt with, roaring economy, recession averted. We even still have a fairly tight labor market pushing up wages a bit.
- arcticbull 4y ago
  Yup, the 'soft landing' narrative we put to bed 6 months ago or so seems to be making a comeback. Fingers crossed.
- Yoric 4y ago
  You're speaking about US. The rest of the world is still quite shaky. And everybody is looking towards China reopening and wondering how that economy will fare in the post-zero-Covid-policy world.