1) Why are the Markets so obsessed with the Federal Reserve?
Why do some investors believe the”war on inflation” has been won? Is it due to the falling commodity prices 23%?
“hope” for a pause is not a strategy in our opinion.
It appears investors are “wishing for a Pivot” trying to talk rate hikes down and throwing out bad scenarios to the media that is needed to curb inflation. Talking their book.
Former Federal Reserve Vice Chairman Roger Ferguson says the “hope” is premature.
1A) The money supply grew rapidly in Q-2 of 2020 and beyond up to 66%.
Now the money supply is falling 4%. With rate hikes, is this enough to slow Inflation?
Can the Federal Reserve’s interest rate hikes work without a “hard landing”?
2) Treasury Secretary Yellin – “U.S. Economy doing well. It has slowed down after a strong recovery and based on the job report is resilient”
The economy created 263K jobs in September and the Unemployment Rate is 3.5%.
3) The IMF and World Bank are in D.C. UN is concerned about Central Banks raising rates.
4) Jamie Dimon, the COE of JP Morgan says the U.S. should pump more oil and gas to help with the Global energy crisis.
Biden says Saudi Arabia will suffer “consequences” for OPEC+ production cut.
5) Household spending is up 6% in September but down form 7.8% in August year over year.
However the personal savings rate is only 3.5%.
6) Eggs are up 40%, butter and margarine + 30% and gasoline +25%.
7) Consumers expect Inflation rate a year from now to be 5.4% down somewhat from 5.75% in August.