‘Tangible Risks’ As ‘2018 Redux’ Worries Grow
"It's possible we won't see the same pressure on the Fed to back off if markets continue to wobble like they did in late 2018 for the same reason -- a Fed determined to tighten policy," Morgan Stanley's Mike Wilson said, in his latest.
For months, I've suggested the Fed risked turning December 2021 into a rerun of December 2018, when Jerome Powell inadvertently exacerbated his fateful "long way from neutral" communications misstep with the equally misbegotten "auto-pilot" faux pas.
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Notably, if policymakers across the world implement new lockdowns as the Omicron variant spreads (or simply as a result of seasonal virus flare-ups), it could worsen inflation pressures by prolonging supply chain disruptions.
Shouldn’t it also help expedite the demand overflow we’re experiencing? If people start fearing for their income and without visible fiscal support in the offing, maybe consumers will stop pushing pedal to the floor on spending?
Has Jaypo learned to putt?