Posted on 07/14/2022 6:07:50 AM PDT by Browns Ultra Fan
Face it. The Biden Administration has little interest in trying to increase the supply fossil fuel energy which would anger his “green” base (like building more refineries or allowing for more crude oil and natural gas exploration). So, the burden of “inflation fighting” falls on the frail shoulders of The Federal Reserve.
Given today’s US Producer Price Index Final Demand prices rising +11.3% YoY in June, it seems that The Fed has not been able to extinguish the “Tower of Inflation.” But, Fed Funds Futures are pointing to a near 100 basis point (or 1%) increase in The Fed Funds target rate at the July 27th Fed Open Market Committee (FOMC) meeting.
The Fed Funds Futures Data points to a +0.920 (almost 1%) increase at the July 27th FOMC meeting. Followed by rate cuts.
And with the fear of a near 100 basis point increase, today’s stock markets are a sea of red.
It is up to Fed Chair Jerome Powell and policy error brigade to extinguish price increases caused by 1) bad Biden energy policies and 2) too much spending by Biden and Congress. It is like trying to wave-down the Super Chief train with a cigarette lighter.
Yet, the Frail Fed will try to waive down The Super Chief inflation engine with Fed Fireballs. Aka, rate increases of 100 basis points.
(Excerpt) Read more at confoundedinterest.net ...
Prepare for ‘Carter-like’ mortgage interest rates!
I remember those days- it was around 18%
It is up to Fed Chair Jerome Powell and policy error brigade
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Errors brought about by incompetence, mismanagement and ignorance.
Jimmy Carter’s “national malaise,” here we come!
Wheeeeee!!!
Yeah, but the ‘core numbers’(?) are down for the 3rd straight month. Or so I hear. I know I feel better now. 🤬🤬🤬
And we’re off!
-208.54 DJI
How is the dollar strengthening and oil price dropping? Are overseas investors buying up dollars? I know other countries are bad-—but are they so bad they they want our dollar?
Dow down 520
Oil $93 (Biden will claim he did that)
Stocks cratering? Team Biden will just announce that they’re reducing inequalities of wealth. And the left will hail it as progress.
I remember those days! I was transferred to DC and left my 6% mortgage in Alabama to thankfully buy a home with an 11% mortgage (only because the builder had earlier secured a commitment financing his 200 home development). The selling price on my home in Alabama was the DOWNPAYMENT of my home just outside DC!
Jimmy Carter is no longer our worst President in modern times (at least he was not corrupt and mentally incompetent!)
Loan defaults on the rise and will get much worse. Will JP Morgan be the next Lehman Bros?
And gold busts $1700. Wowwww.
joe has already given his malaise speech:
https://www.dailymail.co.uk/news/article-10924991/The-AP-Interview-Biden-says-recession-not-inevitable.html
The dollar's absurd show of strength cannot last.
The market has already priced in a .75 hike and rates dropped slightly. I’m sticking with 2 hikes and then the Fed flip flops.
It can certainly last longer than you or I would project. Remember, “the market can remain irrational longer than you can remain solvent”.
What has completely surprised me this last week is the bond rally. Why, with strong rate hikes promised, would there be demand for bonds, whose fall in value is rigidly tied to a rise in int rates? Is it a market maker runup designed to pin bonds high so they can be shorted high? Is it the expression that the stock market in which literally nothing is working is not done falling? And now with oil tanking, not even that is working. Is it a pure liquidity suck? Is it frantic demand for dollars, REGARDLESS of what you or I think about how crazy that is? Why, with rising rates, are bank stocks languishing? Shouldn’t bank stocks love rising rates? Not if they are forecasting a collapse in economic activity. For sure not. Personally I think it is a combo of all of those.
My “stock market centric” tell is the bank stocks. Just watch JPM or XLE. In my opinion, there is very simply no upside in this market until the bank stocks stabilize and at least start holding. None. JPM has been making new 52 week lows on quite the regular basis.
The Euro is weakening faster than the Dollar as the European economy declines faster than the US economy. Other currencies are being inflated by their respective Governments (Mexico, Japan, etc.) at a faster rate than we are inflating the Dollar.
The price of oil has hit "Demand Destruction" levels. Supply chains are starting to contract due to shipping costs.
With the Government claiming 9.1% CPI inflation and real inflation is ~18% (see shadow government statistics), using the Fed’s Taylor rule with their own CPI Fed Funds rates should be around 13%. It is 1.2% LOL. Moving Fed Funds to 2.2% is a clown show. Using the Taylor rule with the real CPI would be a Fed Funds rate around ~20%.
Nah, too big too fail. And Joey will bail them all out anyway.
the Fed simply cannot solve the cost and price inflation caused by energy price increases due to scarcity, a scarcity deliberately created by dementia joe’s green new deal puppet handlers ... in fact, trying to cure an inflation due to lack of natural resources by reducing the money supply will simply drive the economy into a depression ...
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