"We aren't really talking about rate cuts right now. We're very focused on the question in front of us, which is-- as Chair Powell said -- the question is: Have we gotten monetary policy to a sufficiently restrictive stance to ensure that inflation comes back down to 2%. That's the question in front of us and that's the question we've been thinking about for the past five months and that's the question we will be thinking about for some time. That's the topic of discussion for the committee....the discussion really at the FOMC right now is about 'do we have monetary policy at the right place' not speculating about what will happen in the next year'." He later added that "it's premature to be even thinking about March cuts". The market is pricing in a 76% chance of a March cut, down from 80% yesterday. https://www.forexlive.com/news/us-d...ents-from-ny-fed-president-williams-20231215/ I am not complaining. I made a killing going long US 10 yr futures few weeks back. But when the most powerful central bank(st)er globally repeats communication errors REPEATEDLY, then something is ROTTEN! I wasn´t a fan of Greenspan, we were lucky to have Bernanke through GFC, Yellen was BORING....But Powell is a communication disaster.
Disagree. Greenie, Bernie and Yelling were the three bind mice seeing nothing till it was too late ... for everything but dinner. Powell so far was too late starting to raise. The jury is still out if he is too early to pause and we''ll have to see how he does when they actually start to drop rates if the timing is wrong for that. IMO.
Powell went dove just after his hawkishness two weeks ago. What’s that all about? probably couldn’t sell the papers.
Getting long ZN a few weeks back would be so sick. I made a huge mistake being massively long 4 week bills here. My Nasdaq beta portfolio is only 40% invested even. I am going to figure out some trades this weekend. This headline though I am just not buying. To not have a regime change after this week would be ridiculous. Of course, you have to be open to the idea that rate cuts take longer than expected here. Inflation data releases I am just going to avoid trading around. I have no problem changing my mind so if we want to do some confused 2 state hidden markov model oscillation, I am good. That would be so bearish. I would love to hear what 97 year old Alan Greenspan thinks of the economy and interest rates right now. "Helicopter" Ben Bernanke can never be touched though . The great beard, he comes in with helicopter money at the perfect time then retires. 2005 gold bug joke. "Maybe helicopter Ben will become the Chairman and drop money from a helicopter". That is exactly what happens as gold eats a 50% drawdown lol.
That's John C. Williams. He was at the San Francisco Bank previously. He's a great choose to lead the NY Fed. He'd be one of my top picks to Chair the Fed Governors. He has a detailed understanding of Fed operations down to minutia, and he understands U.S. fiat money. He is up to date. He can communicate with the MMT economists because he's on their wavelengh. I have read his papers and I have great respect for him. I really wish he was in Powell's spot. Powell didn't have the right background. He had to learn on the job, and still gets things wrong.. Not what you want in the top guy.
There are communication errors because interest rates themselves don't have much effect on inflation. It makes no material difference whether the rates are 5.5% or 4.5%. But it makes strong headlines. The decade after GFC saw basically zero rates and non-exisiting inflation (at least by the measure of CB's). That's a proof strong enough imo, to define the (not so good) relationship between them. So, it's possible we won't see low inflation for some time, even with 4-5% rates. In the end, though, who knows. And that unknown is exactly why the job of the CB's are pointless. They just make matters worse exactly because they don't know either, so you get market distortions and then policy/communication errors. And even if you get lower CPI's, you'll just get higher real estate prices. Or other financial asset prices. Inflation just moves from one asset class to another. You won't magically get a higher standard of living with lower inflation.
As long as Fracking continues strong and China muddles along I would expect Inflation to continue to moderate over the course of 2024. If either changes "Katy bar the door".