What is the Fed Smoking?

We have a booming economy, stocks at 4 year highs and midcaps at all time highs, 10 year yields at decade lows, low unemployment.. what the hell is the fed thinking of stopping the hiking?

Look at housing and commodites.. I dont believe the minutes today.. i thikn they are bullshit.. fair value for rates should be 5.5%.. not 4.5%.

The yield curve is on its way to being inverted.. completely idiotic.

--MIKE

 

are you getting squeezed yet ?

 

No... i am just dumping all my longs into this insanity.

 

Whatever.

 

i got squeeezed a bit in the er2. i think the fed has been bought off by wall st.lol.

 

LOL...While I can imagine the sarcastic tone of you saying this, I again don't believe it encourages anyone to post their trades...this is for the benefit of traders afterall!

Having said that, it is funny

 

Do you understand that the curve's inversion is the reason the Fed thinks the tightening is perhaps overdone?

 

I understand.. but usually the fed stops raising rates when economy slows down... we are no where near that yet... bond market long rates are artificially low they are not reflecting true health of economy.. thats the conondrum thats going on...

 

Recessions are a natural part of the economic cycle. If the fed is tring to avoid one by keeping interest rates artificially low, we're gonna have to pay for it down the road.

Inflation and growth are strong, rates should be much higher than where they are today.

 

So you're beef should then be with the credit markets rather than the Fed. The Fed is merely echoing what curve traders are indicating.