Why Goldman Sees Risk Of Fed Tightening ‘At Every Meeting’

Why Goldman Sees Risk Of Fed Tightening ‘At Every Meeting’

Starting in March, the Fed could "take some tightening action at every meeting until the inflation picture changes," Goldman's David Mericle wrote, in the bank's FOMC preview published over the weekend. Goldman's economists are "more concerned" about the inflation outlook than they were previously, given still elevated wage growth and the possibility that the Omicron wave prolongs the distortions contributing to price pressures in the goods sector. Mericle didn't mince words. "In coming months
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3 thoughts on “Why Goldman Sees Risk Of Fed Tightening ‘At Every Meeting’

  1. Simply taking the wind out of crypto’s sales will have knock on effects as it relates to miner demand for semi conductors. Miners have spent billions on machines over the past year and a half and are no longer incentivized to continue their spending spree.

  2. The thing that always strikes me as how so many (not H really) view the situation as black and white. Either we tighten a lot or not at all. The middle ground, given where we are seems best. Yes stop buying bonds and growing the balance sheet. Yes let’s get off the zero bound on policy rates. After that the FOMC needs to look around and see what the actuals are on the ground. All those hawks screeching for rapid rate rises are many times talking their book, or have a political ax to grind. Hey maybe we need to tighten 4 times in 2022 and start to run down the balance sheet. But if one was honest and somewhat humble you would have to say nobody knows for sure because things can change rapidly in this environment. A responsible FOMC would take that tack and start the process and see where it leads.

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