The Feds just as easily might do away with it too. If holding the interest rates at even 5% does enough damage to bring inflation down over the next 2 years, they will consider it a "success". And the moment they even decrease rates once by 25 bps, markets will lose their minds and rally to new highs. We are entering a new era now, where "Japanification" of American and in turn global economics is underway - hopefully, a very slow process unfolding over several decades before we sell next few generations for our immediate needs. The classic debt cycles will be abused worse than rule 34 hentais about Sammy the assistant.

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In addition to all of the above, it appears reasonable for the Fed to raise the “target CPI” up to 3-4% and call it a day

I don't think the Fed is aiming for that. Estimates are 5.4% by July it seems and then hopefully there will be good enough data to pause.

Depends, the target has always been 2% and if the fed goes changing the target, it will be seen as moving the goal posts because you can't win. Fed would lose credibility quickly.

We are experiencing stagflation. This is the worst case scenario because the Fed waited to long to act.

Calls? Puts? Explain like I'm five

Powell said that’s not happening

Powell said that’s not happening

Isn’t it the same guy who assured the public that inflation is only transitory?

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It is, transitory means not permanent. Since the end of time hasn’t been witnessed yet if it ends anywhere before that, it was technically transitory.

You can see that Taylor rule overshot to the downside by a lot so it makes sense it overshoots to the upside. Fed rate will not go that high.

Part of my thought this was the Taylor swift estimate.

Both. And you’ll still lose money.

Technically correct, best type of correct

You wanna put some lines on that graph and tell us that Taylor Swift is going to the moon as well?

>Sammy the assistant.

I'm honestly curious, but also not sure if it would be a good idea to Google it 😆

Instead of this why wouldn’t the fed just rip the bandaid off and raise rates +200 bps in the next two meetings? Not being a smartass just actually a dumbass and don’t understand

Calls on Dua Lipa

Taylor Swift is involved in large scale finance/economics?

She needs to write a breakup song about inflation. Maybe that will make it go away

Always has been.

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That's the good shit right there

Can you elaborate on what you mean by "Japanification"?

What does this mean?

1.) They don’t want to crash the real estate market 2.) Crypto is still a threat to the dollar

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They can't lose what they don't have.

Only 5% away. Barely over the half way mark.

Because they only pretend to fight inflation, think for a moment who created this inflation in first place.

The Central Banks basically inflating the economy with NIRP and mindless QE + loan programs, year after year, decade after decade, while we live in a low growth/low inflation environment. There were fears that would be our fate for a while now, and then suddenly this supply side constraints and sudden increase in demand shook things up. Newer generations are not only holding off on having kids, bringing down birth rate, they are also delaying participating in the conventional credit cycles, choosing a less productive lifestyle in non-STEM, non-business careers (trade schools etc), which is creating a talent gap (for now, USA can still fill it with immigration, and then the right-wing nuts lose their minds without seeing the bigger picture).

Everything is running on debt more than actual growth: the markets react positively to bad news because it means debt will be cheaper when Feds relent and decrease rates eventually. Corporations are spending money on share buybacks and monopolies pretty much hold the economy hostage. Tech used to lead the pack in growth because there was so much to reap from just Moore's Law scaling. Now we are at the end stage of that, plus a saturation of mobile computing and cloud computing. What we are left with are dubious future tech and protocols, which are desperately creating problems to solve than the other way.

Feds are way more powerful than BOJ, so they can still get away with most of it. And USA got their buddies in EU and western world to ensure it maintains dominance over rest of the world, while "outsourcing" its misery to the poorer countries in due time. But with rise of China, Asian and African countries finally have an alternative to the oppressive/meddling shenanigans of west. An open challenger stands in the way and the curmudgeons in American politics barely know how to respond besides the sanctions and bullying tactics - which China is using to its advantage to corner its part of the world.

EDIT: triggered the idiots already. You guys are a parody of yourself.

Theta fucking it is. Loading up.

What is the Taylor rule?

What do you mean by Japanification?

John Williams - Shadow Stats; he says inflation is 16%… US Government playing games with Stats. Millions of people will be loosing Covid-19 SNAP benefits in March. Covid SNAP benefits kept people out of poverty, that is not factored anywhere.

Who's going to want to hold crypto when you can earn a safe 5%+ per year on your savings acc?

This is stupid. It is the neutral rate at time = 0, doesn’t mean the fed will hike there. The right way to look at this is to see where implied fed funds is versus inflation break evens to back out if fed funds are restrictive or not. They currently are.

spread them cheeks

You’ll have to wait until unemployment gets bad to call it that

People worried about the longterm survival of the USD. It's status as the global reserve currency has never been threatened to the degree it's at today.

Technically true. I believe we've locked in conditions that ensure this. Fed is too pussy footed to do what's needed. Remember transitory?

It's pretty clear that we aren't experiencing stagflation. In stagflation, the inflation rate has to keep increasing even as growth slows, and stagflation is specifically characterized by high unemployment and high inflation at the same time.

​

Unemployment is low, inflation rate is decreasing as growth slows, and the inflation adjusted GDP is still growing. The only argument for stagflation is that everyone is lying about everything and that the government is controlled by lizard people.

People can’t afford homes, the housing market needs to crash.

typically when the fee cuts rates is during an economic free fall

> for now, USA can still fill it with immigration, and then the right-wing nuts lose their minds without seeing the bigger picture

There's a touch of irony here. There's an even bigger picture you're not considering here that the "right wing nuts" are in the right about; longer term downward pressures on wages due to infinite labor supply, elimination of whole sectors of industry, as well as strain placed on social systems by importing net unproductive people. The immigration system in the US does not select for the best and brightest globally, unlike immigration systems in most other countries.

Comparative advantage needs to be held up against localized losses. It doesn't matter to the unemployed that everything is 10% cheaper when their jobs are eliminated and there's no path to retraining.

You lost me at saying trade school careers are causing us to be less productive. Having a good supply of competent people building and maintaining the country is a value add, not a subtraction...

It's worth reminding everyone that inflation is a YOY rate of change metric. If everything goes up 10% in year one and then another 5% year two, the reported inflation rate will be 5% despite everything having gone up 15.5% in two years.

With enough time inflation will eventually "come down" so a decreasing number is misleading with regards to how much stuff increased in cost.

Construction of buildings, putting plumbing lines, electricity outlets is not driving a country's innovation and tech lead, as shocking as it may be to comprehend that. This is such an inane comprehension of real world, I don't know where to begin explaining how stupid it is. By your "logic" - not even worth calling that, schools failed you terribly - developing countries should be world leaders because they are in fact overcrowded with low-skilled workers.

> net unproductive people.

lol, the "unproductive people" are the privileged white demographic. You are getting engineers, doctors, professors, phd students on scholarships and affluent families as your immigrants, while you squander away your stimulus checks on 0dte plays.

But keep licking up to the right-wing nuts, who do everything possible to make your life difficult, ensure terrible wages, fuel up military industrial complex stealing funds from the most basic social support system and write corporations blank checks.

The irony, if you knew how to use that word, is not realising how you are exactly the lazy, privileged, misinformed idiot that is a product of a failing system.

It's a nessy formation so iron condors

Don't ask don't tell

> You are getting engineers, doctors, professors

Tell me you know nothing about US immigration without telling me you know nothing about US immigration.

> the "unproductive people" are the privileged white demographic

The Left sure does a great job proving they are anti-racist people who care about the little guy....oh wait

>you are exactly the lazy, privileged, misinformed idiot

You got literally everything wrong. You are a white guy who has enough disposable income to mess with options trading.

The amount of irony here is palpable.

>You are getting engineers, doctors, professors, phd students on scholarships and affluent families as your immigrants

Only about half of US immigrants have graduated high school (or equivalent)

Shoddy or delayed construction, plumbing, or electricity is a massive drain on the economy of a country. If there is a massive shortage of workers willing to even do the work and a lack of people with a couple brain cells to rub together entering the field due to your ridiculous mindset, the innovation and everything you rely on is not possible. Also, the trades wouldn't be paying such outsized wages if there wasn't such a need for them. Your argument makes the assumption you can remove the middle levels of the scaffolding and add to the top to help a country move forward.

In before inflation persists through the end of time.

Muhahahaaa.

The obvious take away from that, is that Taylor is shit at estimates

Old news- we crushed Russia, rebuilt our alliance with Europe, and isolated an economically weakened China. We’re back to 100% secure for at least the next ten years, maybe longer.

Europe was never the threat to the USD, it's moreso players interested in subverting the petrodollar (some of the BRICS countries and players in the Middle East). Without the petrodollar the inherent faith that props up the USD as a global reserve vanishes.

Russia is far from crushed, be mindful of propaganda. The real variable is whether or not China chooses to ally with them as part of an anti-Western axis or chooses to betray them while they're vulnerable.

A lot of people think the current numbers are BS, myself included. At very least, they don't reflect the true state of the employment market because of the way they are calculated.

But you're right. I think it will get there in the second half of this year.

Why?

This is the dumbest argument I've ever seen.

Agreed on the fed taking to long to act, it was a dangerous choice.

As for stagflation, you're technically wrong but I agree with you. If we didn't have a pandemic where it was hard to find workers, we wouldn't have companies hoarding employees like we have now. But over time, I expect unemployment to rise as the rate increases take effect.

Yet it is correct.

Google the Japanese asset bubble, it fucked their economy for like 20-30 years.

Didn't you know? Tech bros and middle managers are more productive than builders and plumbers and electricians.

The moment there is a first rate cut , markets are GOING TO LOSE THEIR MINDS! SPY instant +37% in a day.

Dawg, the US has 15 or whatever carrier groups.

The only currency is violence. If the Middle East fucks with the dollar, we will just kill them.

That’s what I’m waiting for. I’m not worried until or unless unemployment really heats up. The way I see it, the economy is currently working for almost everybody.

And they can do their work without working buildings, electricity, or plumbing! I mean, it's working fine right now, what do we even need trades for??

The US military hegemony is only as strong as its ability to fund that. Just printing an extra trillion dollars or so in a year has nearly broke the entire domestic economy, there's no way the US could mount a multi-front war at the moment.

Not to mention that such a conflict would rapidly increase the speed of adoption of US-alternate currency options.

First point, as someone going into the labour market, sounds fantastic. Iz crypto really that much of a threat still? I thought it was pretty clear that it was a largely unregulated market and that it would need some major changes to become valid currency(I could be very wrong)

I agree, but lets face it, people are still paying these ridiculous prices, both in sales of homes and rent. I really feel bad for the renters getting waxed. Perhaps that is why so many are desperate to purchase a home in order to at least “keep” the money they pay each month

I'm waiting to see what Beyonce says.

5%+ means nothing when inflation is currently above and steadily outpacing that figure

IMO today’s situation is immensely different from the Volcker era. Being a fan of Volcker I believe JPow knows exactly what to do but there’s just too much debt, personal and national, tied up in the economy. What they are trying to do is just to raise the rates high enough to see if they can bring the inflation down slowly over time while not fucking up they whole economy.

As always

No one without brain worms is more concerned with the longterm survival of USD than a highly manipulated speculative asset.

Its unstable and thus a gamble.

The negative sentiment towards crypto is growing fast.

Crypto is great if you want to hide shit.

My bet is they gonna raise

All currencies are highly manipulated speculative assets (George Soros famously got rich by playing the GBP).

The only difference right now is that cryptocurrencies aren't treated as currencies...yet.

WSB 2022: “Transitory? Powel’s job should be transitory. Of course we have inflation m1 went up 8464538265% in one hour!”

WSB 2023 YTD: “Inflation is dead, we have a no-landing scenario here.” “Soft-landing confirmed (various clownass Uber bullish noises) TSLA to 500 by EOY.

The Fed and every reasonable economist out there knows damn well only a recession gets us where we need to be. But then again maybe we can just have an 80 year bull market and the labor market won’t crack for the first time in recorded human history right?

Stupid people find shit they dont understand dumb. Thats why they're dumb.

She's the only reason why the US economy hasn't collapsed yet

Dont forget the gay frogs

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seems like it never does and never will (until rates fall, then briefly)

I secretly hope for 10-15 years of SPY chopping after which conditions finally ease and SPY hits $600 where I can unload my bags, sit in cash, and cherry pick stocks to carry into retirement as I wish.

Easiest short of all time then. FOMO crowd is left poor, and bears are the new gurus of Wall Street. Fed doesn’t cut rates because they felt cute and decided to be nice, they cut rates because at some point something breaks and it’s them trying to clean up their mess. Happens everytime they raise rates repeatedly

Fixing the real estate market will not fix the value of the USD. Still have to pay high energy costs, utilities, and insurance.

japan's stocks have no where near the coh and stability that american companies have.

it's like saying ARKK was a bubble, therefore the US must be a bubble. completely unrelated.

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Dude asked what "japanification" was, i explained, and the "everything bubble" is pretty well documented wtf are you going on ARKK about lol. The US has a recession every 10-15 like clockwork try reading a fucking book or something Mr. stability.

guess you got it all figured out. you can resign from your wendys position!

Crypto now directly correlates with interest rates it would crash with the market

I don’t understand what any of this means so I’m just gonna keep gambling on high risk swing trades and speculative long holds and hope I win the lottery basically.

Russia can’t even handle our second-line weapons being given in relatively small numbers to a country a quarter of its size. What we found out from Ukraine is that the Russian military is laughably weak in comparison to NATO, and that’s not even speaking of the US military. Poland could apparently solo Russia no prob, based on what we’ve seen in this conflict.

China has an even worse position, since any war with them would involve them needing to make a landing on a hostile country that has shitloads of missiles and the support of the largest navy in the world by 10x.

That is the exact propaganda I am talking about. It's not actually true. But that very propaganda helps feed the narrative needed to keep supporting Ukraine financially.

If you don't believe me then set a reminder for yourself a year from now when Russia mysteriously emerges as the victor.

EaSiEsT sHoRt Of AlL tImE

Do it, please FOMO buy in when they cut rates. Only call options, no shares. I can’t wait to see you go tits up

It might be in a year it might be in 3 years. It might be after a 30% crash. Wahhh short it

how about u eat my ASS

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I just got promoted to shift manager

CONGRATULATIONS

EXACTLY! Right now there is a short term pressure of FOMO by all the people who think they are smart waiting on the sidelines. Too much money waiting for better prices. Stocks will moon just enough that the buying starts again and it's a new "bull" market that defies logic.

Then the true dump begins.

Jumping in way late to say I don’t think anyone in politics is looking out for the interest of common folks, immigrants or otherwise. It’s all a façade. Then we argue with our neighbors about who is right and who is wrong all day, while those fuckers collect paychecks from our taxes. The remainder then gets funneled to big business because we need privatized companies to help the government do its fucking job, and while they figure out who is going to get paid, they all shovel every dime they can into the market to collect a fat premium on the “work” they did for the American people.

Fuck ‘em. Seriously, both sides are just as corrupt, just as immoral, and just as bad in completely different ways. Congress, and all politically appointed representatives should make minimum wage and not be able to participate in anything other than buying ETFs or throwing shit into a savings account.

Couldn't agree more. Government being a necessary evil that needs to be as impotent as possible seems to be the only valid take.

Wall Street has to offload their bags. They aren’t stupid and are way better with math and economics than the rest of us. They see where this shit shows going. Once they can unload a bigger portion of their holdings onto Main Street they can start to dump their shares, and will plan on buying up the shares they just sold to retail once the market is down another 30% and retail capitulates.

He said 0.75 beep hikes were not happening either, then did it 4 times in a row.

Maybe it's the fed rates that overshoot because they are regards like us?

I'm convinced most people are incapable of comprehending nuanced language. Here's what he said regarding 75bps rate hikes in March 22:

"A 75 basis point increase is not something that the committee is actively considering."

And here's what he said about raising the target inflation rate:

"We're not considering that. We're not going to consider that. Under any circumstances. We're going to keep our inflation target at 2%. We're going to use our tools to get inflation back to 2%."

So, you see how the first statement wasn't a dismissal of 75bps rate hikes? But rather a statement about what's been presently considered? There's a lot less nuance in the second statement.

Sure, but when it overshot the downside, it immediately corrected itself. If your logic is correct, wouldn't we have expected the Taylor Rule to shoot back down already?

Obviously I don't expect a 10% rate, but those two lines converging around 7% seems reasonable and horrifying.

They don’t care about the people buying homes silly. They care about current homeowners having their home values rise to infinity.

Right… 😉

https://www.oryxspioenkop.com/2022/02/attack-on-europe-documenting-equipment.html?m=1

Lists of equipment losses and casualties supported by photos for every one are hard to describe as propaganda. Russia’s running up almost 2000 tanks lost- at least half their serviceable fleet if not more. Comparable losses in other equipment, usually a third of it was captured by Ukraine. That’s not what a competent power looks like, and no, they’re definitely not gonna win, unless maybe taking just the Donbas at the cost of 200-300 thousand people is a victory

They only rise to infinity as long as demand is infinite. Jacking interest rates are to limit that demand. Too high, too quick and that demand dies . Home prices are not what they were in the 80s

The instability you mention - is that related to the recent debacle of FTX? These kinds of negative publicity stunts are manufactured as a way to dissuade the laymen. Actual blockchain/crypto currency can’t help but be stable

That's a data point in isolation. You haven't heard the alternate explanation for those things so it's natural that you would see those as justifying your worldview - that is exactly how good propaganda works.

Look up Russian military tactics, going back 80 years. They use the attrition model of combat. They send overwhelming numbers (using their most expendable soldiers and equipment) knowing that statistically an opponent of even half the population cannot win against those tactics (this is well established military doctrine in the US as well, btw). In the West we don't consider such tactics ethical but they do in Russia.

If you don't believe me go look up Russian losses in WW2, Afghanistan, Syria, etc. They all used the same tactics.

I want you to keep this conversation in the back of your mind for a few months from now. You will be confused how Ukraine "suddenly" lost. The MSM will have an explanation for it that you will likely buy into. Think about how I know all this before it's happened.

suprised anyone on here knows what taylor rule is

Japanese thought the same about their companies, that's what pumped them in the first place.

Not yet, I think inflation is still high but the amount of disinflation already in the pipeline is eventually going to show up in numbers and once it starts going down it goes down fast. That's only my opinion obviously, I don't know what will end up happening.

and their P/E was 60.

for reference, spy is only at 21.

so if SPY pumps to $1,200, then yeah I would absolutely sell off and divest.

Ha, many think that recessions are worst than inflation.

There is no place to hide. Crypto is on life support.

There is a shortage of homes. Isn’t it arguable that those who can afford them should have the homes?

So it's useful if you are a warlord, drug dealer or a billionaire.

Not just ftx, the market in general seems to have a lot of fraud and as of now it seems like it's too easy to magically make money appear(hyperbole).there's also that most stable coins that I know of are backed based on usd or some other currency, which is a problem when talking about cryptocurrency becoming the new global currency.

I also personally dislike the technology and the people leading the charge, I don't think privatized currency would be a good thing for most people, so in my view a govvy run cryptocurrency just seems like worse money.

Feel free to tell me why I'm wrong though, I've done enough research to form opinions but not enough to be sure about them

https://youtu.be/nGy9uomagO4

True crisis are credit crisis.

When you give people money and they don't pay back, that's when shit hits the fan.

Ha, tesla has a PE of almost 60. They flagship of usa stonks.

tesla is not sp500.

Should've known all the regards here don't know what the Taylor rate is and should've added that information somewhere in the post. Taylor ain't the "dude" behind Wendy's either

You heard it here first gentlemen. You don't need basic infrastructure to be tech leaders and innovators. Candles and Papyrus only.

So it will go to 6%

Taylor happens to be my wife's boyfriends name

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It's ok to be a simp and still be sigma if it's simping for Dua Lipa, trumps all

in short, yes... also, hacker of course

Who tf is Taylor

I had to go to Wikipedia to learn what the fuck the Taylor Rule was.

You fucking nerd.

PS: JPow is a pussy for not raising rates earlier and higher.

Yeah, those nerds too.

This song has been stuck in my head since the eighties...

Yes, pumping a trillion dollars into the private sector via interest rates (govt is a net payer of them), should definitely slow down inflation. Nothing like pumping $1T into the economy to slow it down. The loan trend should be downwards then, yes, even slightly so if hiking rates effected loans negatively. That is the Taylor Rule thesis correct?

Let's see how 1 year of rate hikes worked on our loan applications: https://ibb.co/64Srz64

https://twitter.com/patrick_saner/status/1628690771141328897?s=20

Rate hikes increase inflation, (esp w/ a high ratio of debt/gdp, interest rates are expansionary), put more money directly in the hands of loan writers. Who increase their income, just like a bond investor might invest in bonds, by writing more loans.

This is old-school economics, and it's just plain wrong, along with a whole other bunch of theories from the 90's. Economics' isn't a science, and even if it was, this wouldn't pass any litmus test.

Like Hell we couldn't. That is our literal battle plan. You have no idea.

you keep telling everyone to nOt LiStEn 2 PrOpoGaNda, but all you spout are anti-American russian sound bites, and it is so blatantly obvious that i am reporting you for that.

don't listen the guy that is predicting russian victory, and that the American military can't fight, he is obviously a russian shill.

I reported him for misinformation, and you should too.

if you want to hide shit, do not do it on a permanent ledger...that is the opposite of hiding...

what hopium are you taking? there have been a series of hacks, and entire companies dissolving, and you claim it is all a show?

Tell that to Sam bankman...freaking idiots here eating that tripe...

Oh graphs more graphs

Lol