The Financial Collapse of 2001 Unwinding Message Board

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Strategies & Market Trends : The Financial Collapse of 2001 Unwinding

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elmatador

To: elmatador who wrote (13638)	8/1/2025 12:45:58 PM
From: nicewatch	1 Recommendation Read Replies (2) of 13771

The Trump Fed kerfuffle is just fodder for the economically illiterate financial press. Many presidents have tried to jawbone the Fed with little to no effect, except Trump has a bigger mouth. Congress has oversight of the Fed but it has to maintain a decent degree of independence. The dual mandate is conceptually flawed and contradictory and should be rescinded, imo. That said I trust the Fed much more than I would the clown show known as Congress to manage monetary policy. It is true that Fed's "data driven" policy is like driving by looking through the rearview mirror. The government reaction to COVID was a clusterphuck on many levels that transcend economics. The reaction was worse and is having longer term ramifications than the threat of the virus itself. I agree PCE is more reliable than CPI. CPI is more of a traders knee jerk on release. We'll have to see how things shake out since it's August 1st, and the FAFO principle but do note much of the world has been slowing for at least a year if not in recession. We'll also see about these stagflation claims for the USSA. Dementia Joe Biden's open borders policy was highly inflationary. Massive rapid immigration, illegal or legal, is always inflationary. That has subsided under Trump. Housing is correcting especially in many hotter areas that overbuilt this decade. This has spillover effects as some were speculating with extra properties hoping for appreciation while renting them as AirBNB to cover the mortgage(s) or worse the interest only in some cases I've read about. -gulp- This all seems pretty normal so far as part of a contracting economic/business cycle. Perhaps the great fear is larger global conflict, there are many hot spots and some of the hottest barely make western news, like India and Pakistan for example. Also asset prices are high so any serious correction in USSA markets will have an inverse wealth effect and compound the downturn if your model is based on consumption. All just my opinion. Who knows? :-)

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