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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (13574)	4/30/2022 11:38:22 AM
From: Sun Tzu	Read Replies (1) \| Respond to of 27038

Yes, the Fed is behind the curve in the sense that they should not have raised their balance sheet so much and they should have raised the rates at least 4 months sooner. BUT, the the Fed is wants to inflate the US out of debt. They are never going to come out and publicly say it. But the US situation today is similar to later 1930s - late 1940s. The government (Fed) artificially kept the rates low and ran with hot inflation in order to inflate the US out of debt. This is the playbook that Powel and Biden (and I suspect whoever else will be in WH) are playing off of. Invest in infrastructure and send pork to keep the economy and keep the rates below inflation. What they don't want to do is for the public to wise up to this. So there will be episodic periods of tightening, possibly even sharp tightening, to keep the investors on their toes and not let them build the expectations of inflation into the economy machinations. I've done the math. TNX above 3% is not sustainable. You can go above it temporarily, it won't stay there for long. The Fed knows this and they will not push the rates as high as some people think. Their goal is not crush the inflation. Their goal is to crush the expectation of inflation.