After todays shockingly strong jobs number, the fed will start talking very tough again. Watch the next few days, they will start with their “ kill the market talk”.
%% CAT did have a tough week;\ + plenty of stocks+ ETFs trending up. No telling how much R+D big bucks CAT did on yellow + black color; maybe thats why some did a copy cat on those SOFI put in a topping tail, but i dont really know that one, except good volume. Not an animal biologist or stock tip,
Dunno about that. The Fed doesn't want to see economic weakness per se, they want to see price and wage inflation returning to 2%. The ideal scenario, for the Fed, is that wage and price growth moderates while unemployment stays at rock-bottom levels. At the moment that's precisely what we are seeing. What the equity market wants is a different story. If it can't get easing and money-printing right now, the next best thing is an imminent recession and mass job losses to force the Fed to jam the accelerator once again. The worst outcome for the market is a 1970s-style inflation spiral, the next worst is the prospect of 5%+ Treasury yields for multiple years - meaning equities are priced rich and the October lows won't hold.
In case you did not get the news, the Fed cares about nothing else but inflation right now. They could not give a damn about the few billionaires that got richer or poorer last month. The Fed is doing exactly what they promised, over a year ago. Show us a single fed minute where they diverged from their theme. All the numbers today were red hot. They never cared about the economy other than preventing existential crises. Not even overshoot in the economy. What they care about is inflation and unemployment. And recent numbers leave plenty room to shoot way above 5% this year.
The inflation calculation goes from a two year look back to one year with the next release so could come down quickly.
Disagree. Prices keep on creeping higher month my month. The cpi basket definition is completely outdated. Ever checked the rent component of the cpi? It is a multiple percentage point below true rent asked. Statistics don't lie. Same with most other components.
If they were half serious they would overhaul the entire index and all its composites. Multiple composites diverge from certain alternative data timeseries with a superior methodology by a statistically significant amount. I don't want to go into further detail because those alternative data series are something I use in my models.