economy fed inflation

Gradually And Then Suddenly

"But, hey, we’re hitting our numbers just fine as it stands and, if you hadn’t noticed, our stock price hit a new high yesterday. Why mess up a good thing?"

"But, hey, we’re hitting our numbers just fine as it stands and, if you hadn’t noticed, our stock price hit a new high yesterday. Why mess up a good thing?"
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4 comments on “Gradually And Then Suddenly

  1. As to fretting about tightening: it’s all simpler than that. We simply need to take the hit. The Fed wants to have it both ways, with a gentle reversal, but that is an impossible fantasy.

    When they printed, they were simply bound to unprint. However the act of printing inherently made the kick from unprinting more severe. They threw gasoline on the fire, and think that it can now be “gently” extinguished. They are deluded in that belief. They should have just taken the hit to begin with. No, instead, they did the opposite, not to mention ramping UP moral hazard, compounding the disaster even further.

    Bottom line: they will end up simply turning up the presses, not taking any hit at all, and assuming that they can Fedspeak their way out of the Mother Calamity that they are on a dead set course to.

    • Curt Tyner

      So proper tightening with the right Fed speak will just ever so gently ease us back to, WHAT? Horsesh*t INFLATION has already engulfed the whole monetary system of our planet, it’s called Debt. The inflation the Central Banks are looking for will rear it’s ugly head and run out of control just as soon as the presses stop and stay stopped, not going to happen. At the first sign of trouble the or the shakes , it’s right back to the heroin and QE for the “status quo”.
      This is now and has been in uncharted territory since the foolishness of Greenspan and all who have followed and didn’t have the guts to “take the hit” both financially and politically. Rates should have been slowly moved up to counteract these other fools in corporate world. There has to be consequences for just plain greed and of course stupidity, didn’t and won’t happen.
      Freedom and H are both right, risk and calamity are going to eventually push this to it’s ugly and quite possibly unbelievable end.

  2. Curiouser and curiouser…

  3. Obviously depends on how aggressive they are. Hard to believe that changing the Fed Funds rate to 20% suddenly would be inflationary. Equally obvious they’re unlikely to be aggressive.

    Personally, I doubt NIRP has played out yet. Trump’s Fed candidates Goodfriend and Cohn advocate NIRP.

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