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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: bull_dozer who wrote (51450)2/11/2022 11:00:26 AM
From: bull_dozer  Read Replies (3) of 97653
 
Fed Scrambles To Push Back Against Damage Caused By Bullard's "Immature, Unprofessional" Comments

The rate hike frenzy got so bad that late on Thursday Goldman joined Bank of America in changing its rate hike forecast for the second time in two weeks, writing that "following this morning’s strong CPI print, we are raising our Fed forecast to include seven consecutive 25bp rate hikes at each of the remaining FOMC meetings in 2022 (vs. five hikes in 2022 previously). We continue to expect the FOMC to hike three more times at a gradual once-per-quarter pace in 2023Q1-Q3 and to reach the same terminal rate of 2.5-2.75%, but earlier."

The reason for Goldman's reversal? The bank now says that "concerns about falling into a wage-price spiral deserve to be taken seriously"..

Goldman's pathetic flip-flopping aside, which is only comparable to the Biden admin's flip-flopping on covid mask use, the bank also said that it sees "the arguments for a 50bp rate hike in March" noting "the level of the funds rate looks inappropriate, and the combination of very high inflation, hot wage growth, and high short-term inflation expectations" but then countering that "so far, though, most Fed officials who have commented have opposed a 50bp hike in March." Goldman therefore thinks "that the more likely path is a longer series of 25bp hikes instead."

Goldman concludes that Bullard became the first FOMC participant to call for a 50bp hike earlier today, "and we would consider changing our forecast if other participants join him, especially if the market continues to price high odds of a 50bp move in March."


zerohedge.com
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