It was crazy, right after the announcement at 75 basis points the market moved into positive territory and looked like it was ready to continue the October rally.
"So uh what's our strategy on inflation?"
“I like you better when you don’t talk”
Yep. Same stuff he has said before. Narrative follows price action. Now we move on the Friday’s jobs report. VIX still too low given we saw a 3.5% intraday swing and still have 3 more big events over next 10days.
seekingalpha.com
I kind of agree with both your statement and the posted quote. We have to remember that the market is not the Fed's plane. The economy is. And I argue that it lost control of the plane a long time ago by not getting off 0% faster. IT was just March when the Fed increased rates and stopped purchasing bonds. Now, I think the Fed has no idea how we get out of this without damage. I'm not sure in your analogy if the market is the air-traffic controller or a passenger. I suspect that the Fed doesn't know what it's target terminal rate is and doesn't really know how to get inflation down other than raising rates and selling bonds. But in its defense, I don't think we want the pilot to say "I don't really know how to fly the plane in this situation because there is no training for it"."We may ultimately move to higher levels than we thought at the time of the September meeting. The incoming data since our last meeting suggests the ultimate level of interest rates will be higher than previously expected. The risks are asymmetric. If the Fed does too much, it can cut. If it doesn't tighten enough, then you’re in real trouble... It is very premature to be thinking about pausing... We think we have a ways to go."
Anyone flown an airplane before? Over-correcting makes for much less control.
Same principle here, IMO.
Not a fan of "doing [does] too much" on purpose.
Stock Picks, Stock Market Investing
Manufacturing ISM was just barely "positive" at 50.1, but employment was 50 and new orders showed contraction (49.2). Prices paid was 46.6 which is actually a good sign on inflation. Today's ISM Services was still strong 54.4, but employment component was weak while prices paid was very high at 70.7. We also have seen the impact in Housing, at least at the final product level - mortgages, new starts, etc - and seeing some layoffs in Tech. Lots of data pointing all different directions.
Too bad your now your losing a larger amount of purchasing power with that cash. Getting paid 2.5% when inflation is 6.5% is worse than getting 0.15% when inflation is 2.5%.
I'm OK with things being on sale b/c I can buy some great companies at 30 and 50% off for the long haul. Dumping money in at the highs would hit me worse. Been sitting on the sidelines for a while and ready to drop more in but not quite yet.
Saw them talking about this one on CNBC this morning. What a tumble it has taken.
Watching the companies commercials, I was fairly skeptical. Sure enough.
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thehill.com
