Yeah, So The Fed Is Going To Hike Into A Deflationary Backdrop
Right, so the Fed is either going to:
hike to stave off runaway inflation that they assume may eventually materialize if an economy running at full employment is allowed to overheat
hike into an environment characterized by still lackluster realized inflation and thereby increase the chances that we plunge right back into a deflationary death spiral
No one really knows which.
As noted on Saturday, it's a "who you gonna believe" thing – the labor market or inflation?
It's possible that at
no inflation…. https://fred.stlouisfed.org/graph/fredgraph.png?g=e2Sk
Exactly, Wilson…. and the price index for food and healthcare have risen even faster over five years. But WTF; the liberal globalist elite say, “Let them eat ipods!”.
And the Treasury/Junk spread is trying to turn,