Posted by donkeyface on 31st of Oct 2022 at 02:46 pm
I don't see how they could back down. Total speculation
but doesn't it seem like it's even easier for FED to be and remain
hawkish after a rally like Fridays?
Posted by DigiNomad on 31st of Oct 2022 at 03:00 pm
Agree that recent rally helped the Fed maintain their hawkish
stance. This is goldilocks for them. I'm guessing they are hoping
they can keep up this kind of pressure for about another year while
only taking the market down another 25% or so. I'd guess their
terminal rate is bit over 6 (has to be above CPI) and they hope to
achieve that by this time next year with a mixture of 50 and 25
basis point raises.
"Soft Landing" hasn't been defined, but I think the scenario
above would qualify. "Hard Landing" is something breaking along the
way and the Fed not being able to follow through on policy
necessary to stem the tide on the inflation front.
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
I don't see how they
Fed is not backing down they can't inflation has hardly ...
Posted by donkeyface on 31st of Oct 2022 at 02:46 pm
I don't see how they could back down. Total speculation but doesn't it seem like it's even easier for FED to be and remain hawkish after a rally like Fridays?
Agree that recent rally helped
Posted by DigiNomad on 31st of Oct 2022 at 03:00 pm
Agree that recent rally helped the Fed maintain their hawkish stance. This is goldilocks for them. I'm guessing they are hoping they can keep up this kind of pressure for about another year while only taking the market down another 25% or so. I'd guess their terminal rate is bit over 6 (has to be above CPI) and they hope to achieve that by this time next year with a mixture of 50 and 25 basis point raises.
"Soft Landing" hasn't been defined, but I think the scenario above would qualify. "Hard Landing" is something breaking along the way and the Fed not being able to follow through on policy necessary to stem the tide on the inflation front.