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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: Sun Tzu who wrote (74733)12/14/2022 8:27:24 PM
From: Lee Lichterman III3 Recommendations

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ajtj99
Area51
towerdog

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That's why Powell waited until he was reconfirmed before he went full bore hawkish.
Biden can't do anything about it now. The recession probably won't start until spring/summer so your scenario probably won't be an issue until this time next year. By then, inflation should be coming down quickly and like I said, the Fed can shadow inflation down keeping rates just slightly above it until it reaches target. In the meantime, bond rates will be pricing in the life of the Treasury outlook and risk so will be less than the Fed rate at the time of issue. This is another reason Powell needs to stick to his guns. As long as the bond market believes that the Fed will control inflation, it will assign lower risk premium and accept lower rates. If the Fed backed down, the bond market would demand higher rates to compensate for the higher risk of inflation.
If I were Biden, I would resign. He's a friggin disaster. I wouldn't have traded an arms dealer for an entitled tranny sports diva and left a Marine behind. I wouldn't be signing marriage laws instead of fixing the other burning issues that are by far more important.
I would cancel the stupid programs he promised. We don't need most of it. The majority of the infrastructure plan isn't stuff any sane person would consider actual infrastructure. Fix bridges, water/sewer not all the agenda crap that was included. But I digress.
If I were the Fed, and I've said this many times, I would focus less on interest rates and accelerate the pace of QT.
Interest rates are too blunt of an instrument for trying to fight inflation and the risk of unintended consequences is too high. I think the Fed can bring inflation down by targeting the wealth effect and money supply. Especially now that Yellen is sabotaging QT via TGA. I think he should start draining at a faster and faster pace until the previous QE is gone.
This market forgets what the Fed said within days. They are constantly trying to rally this pig. Take away the punch bowl and we wouldn't have to worry about it.
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