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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: Lee Lichterman III who wrote (43190)11/15/2021 10:57:13 AM
From: Sun Tzu2 Recommendations

Recommended By
ajtj99
Lee Lichterman III

   of 97211
 
Powell is trying to inflate the US out of its national debt while at the same time preventing structural inflation. Structural inflation is when everyone expects it and builds it into their salaries and prices.

Complicating the matter is that the recovery is still fragile. The US is doing ok (not great) but the rest of the world is worse. And we are in a global economy. China just beat their sales numbers by a good margin and their stock market still fell.

Powell is hoping that there will a string of relatively rapid overshoot/undershoot in the economy and inflation. That way he can mask the longer term trend and cycle through the numbers, jawboning the businesses to delay building inflation expectations into their model. Along the way he will grudgingly raise the rates as a token offering to the hawks.

This is the long game plan.
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