no too bad of a close considerin' the nosedive we took...bond mkt thinks feds doner....prob is that bernie's beloved indicator of infla didnt tell him to take it easy....me thinks he'll raise and mkt will tank...but...but...he also will say this is the last time no matter what...and whooosh mkt on fire.
Let's see. You're glad you're not short on a 2% move in the nasdaq, but you are happy on losing 24% on TIE because its for the long term. Hmmm, something doesn't add up.
And then when inflation doesn't abate and he has to raise AGAIN, market will get smacked hard... Not sure how weak the market currently is. don't think it will be a crash like 87 initially (although i do think it will def bottom lower, just over time), but if the market is sound up until next round of major quarterly eco reports (Q3 GDP, etc) then it's def gonna go to sht after people realize growth is stalling, inflation is still pressuring to the upside, housing slump widens and deepens, no consumer spending, etc...
point of discusison - inflation just started rearing it's "ugly" head - the fed has seen this coming for a long time and has made a point of stating that current data is a lagging indicator when pertaining to the FFR and the hikes over the past 2 years. do you thin kben will keep going until inflation comes back down? if it's _just beginning_ to show, it will take a while for it to cycle back in-line: using the hikes that are already in the system.
Right - this is why the Fed is more comfortable overshooting the target than underestimating inflation. If they pause pause cut, or pause cut cut, or pause pause pause, they risk undershooting inflation and leting it get out of hand. Danger with that is in the current global-financial environment they CANT let it get away from them. If inflation starts to get out of hand, hyperinflation can't be far behind. Based on our ever expanding money supply and Import > export = huge deficit spending habits, there is already natural downward pressure on the dollar. And if you consider we are currently in a business cycle in which gov spending is actually out of control - (the culture in the admin is ACTUALLY out of control in regards to spending. This is b/c of the war, special interests, and too long since a REAL recession. 2001 didn't count) - then you can see there are factors that could lead to hyperinflation if current infl gets out of hand. Of course, the Fed would never allow hyperinflation, which is why they have to raise rates. But if they undershoot inflation now, they're have to raise rates dramatically in the near future as Volcker has done in the past (17%???). This scenario would most certainly precipitate the kind of crash we had in '87... if the market hasn't already crashe by then. The recession is inevitable, pausing now would only temporarily placate the market and would be politically motivated due to the upcoming election. Raising rates quickens the coming recession and makes republicans look bad = bad for their election stats. Not raising rates MAY postpone the recession somewhat, giving the republicans a chance to fool everyone yet again and keep/win seats... Gotta love this country.