these comments are spot on. As Steve and I have been saying -
the FED was very clear in what they were going to do, but for some
reason Wallstreet must have started smoking some good weed and was
thinking or hoping the Fed would stop soon
The fact that Wall Street
was surprised inflation continues to run hot and therefore is
disappointed the Fed will be forced to continue raising rates has
me shaking my head.
Did they really think the Fed has been bluffing? Did they
really think Powell was exaggerating when he spoke at Jackson Hole
about not caring about higher rates leading to job losses? Why had
Wall Street started believing the Fed was going to slow down their
operations?
For some reason, years ago "Wall Street" shifted from reactive
mode to proactive mode (trying to predict the future). That
meant a move away from trading based upon steps the Fed
actually takes to a model that transacts
based upon
"expectations". Similarly, analysts no
longer evaluate company performance based upon a trend in earnings
(actual v actual), but rather, compare actual earnings to
expectations. The problem is, Wall Street is anything but
prescient.
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these comments are spot on
Posted by matt on 13th of Sep 2022 at 11:12 pm
these comments are spot on. As Steve and I have been saying - the FED was very clear in what they were going to do, but for some reason Wallstreet must have started smoking some good weed and was thinking or hoping the Fed would stop soon
The fact that Wall Street was surprised inflation continues to run hot and therefore is disappointed the Fed will be forced to continue raising rates has me shaking my head.
Did they really think the Fed has been bluffing? Did they really think Powell was exaggerating when he spoke at Jackson Hole about not caring about higher rates leading to job losses? Why had Wall Street started believing the Fed was going to slow down their operations?
For some reason, years ago
Posted by RichieD on 14th of Sep 2022 at 07:37 am
For some reason, years ago "Wall Street" shifted from reactive mode to proactive mode (trying to predict the future). That meant a move away from trading based upon steps the Fed actually takes to a model that transacts based upon "expectations". Similarly, analysts no longer evaluate company performance based upon a trend in earnings (actual v actual), but rather, compare actual earnings to expectations. The problem is, Wall Street is anything but prescient.