I hope not. There's an absurd amount of dumb money floating around, and YoY inflation is still at 6.5%. Higher interest rates are going to force companies and investors to actually post profits instead of functioning as giant leeches on the economy.
And in the housing market as well. All sorts of silly things have happened with home prices due to all the cheap money.
The Fed uses PCE. It is likely to behave similarly to CPI, though part of the reason the Fed has been as aggressive as long as it has is that PCE diverged more than is historically common from CPI during the inflation spike, spiking higher and coming down more slowly..
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch...
For context:
https://www.macrotrends.net/2015/fed-funds-rate-historical-c...
I couldn't find this particular piece of data published anywhere, but I did a little math and arrived at an annualized rate of inflation for the last 6 months of 5.85%, well above the 2% target.
They’ve barely unwound any of the Feds balance sheet. I think it’s ridiculous for the markets to assume the fight is over and position for a pivot.
Imagine what would happen if the fed started selling $100B+ in treasuries per month. EVENTUALLY we’re gonna have to address that plus our enormous congressional deficit.
It doesn’t take a genius to observe cash is GUARANTEED to loose value. In the current environment it’s the least safe asset…it just doesn’t have the same volatility to it!
In that sense the inflation is now baked in, and we only make future increases slower but we don't unwind back to the original price without some serious deflation.
* Fuel oil -16.6%, biggest decline since February 1990
Seems important to point out to anyone reading your comment
I don’t care what the government publishes. My friends around the country all confirm this. My own bills (I track itemized) show it as well. Though, to your point, much of the increase occurred in 2021 - it just never came down.
2. Fuel is only down because the US has used its strategic reserve to increase supply. At the same time demand dropped dramatically, with China lockdowns & increased prices forcing manufacturing / transportation to cease. Now the election season is over I suspect the strategic reserve will stop being drained; further if price caps work on Russia… we will see a massive reduction in the global fuel supply (Russia will just stop pumping as its unprofitable).
This is not a meaningful phrase.
in any case, I adjusted the comment to clarify
What I'm trying to say is, unless for investment or research, these data doesn't have much to do with we as individuals. You can see people arguing that "You all feel X goes up but I don't feel that", and I'm just saying the same thing but from a different perspective.
