Quote:
Originally Posted by PaceAdvantage
The end of the trading day today wasn't very pretty
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Futures look like the pain will continue
If you scope out the Bond market after the presser today, the traders over there don't buy that the Fed can go through with it's hikes as laid out. Or at least they don't believe those rates will stick.
I have to admit, I'm having trouble believing Powell, he really seems to just be talking a good game right now. Basically going out of his way to sound like an interest rate bully. I wouldn't be the least bit surprised to see him walk it back the moment we get a CPI report showing inflation going down (even a little bit). Hence I'm still buying fixed income/ bond funds at totally bombed out and depleted prices. Maybe rates will go to 10% and I'll be broke, who knows.
As it is I think rates do need to go higher, BUT given how long it takes for these rate hikes to play out, they might be wise to put away the hammer for just a minute. To be honest I think inflation right now is a bigger issue than they can fix with interest rates alone. If you came to me and asked what the economy looks like using interest rates alone to tame inflation, I'd probably tell you the 1930's.
