Bête Noire
A few days ago, a reader suggested the Fed, having woefully miscalculated while appraising both the scope and duration of America's inflation problem, might likewise misjudge the size and speed of the turn.
Although Jerome Powell and his merry band of maladroit technocrats still allude, gingerly, to the idea that inflation could fall faster than currently envisioned, the "transitory" debacle rendered such narratives a national bête noire, especially when they emanate from economists, policymak
All this writing and all we need to hear is when to buy the bottom ?
Oh no, my wink emoji got changed to a question mark. One character, big difference!
Is this a serious comment? This isn’t a stock tips site. If you want Jim Cramer’s real-time alerts or Joe Nobody’s technical buy signals, they’ll be (more than) happy to take your money.
Just feeling feisty. I do read you to time the market though. Or at least to understand the near-term catalysts.
Central banks the world over are in a no win situation. Even if the fomc had perfect timing and called it right, we would still be in the soup. The clue is that they are all in the same boat more or less, despite different timing. Canada is a perfect case study. They withdrew loose policy faster and are still in approximately the same place as powell & co.
Preach. I’ve been following this site for 7+ years, due largely to confirmation bias. I am constantly looking for tidbits of information to make an informed decision about the factors that (may) impact markets. Your ability to capture all of the headlines out of Bloomberg, in addition to synthesizing sell-side research is invaluable. And Cramer is a media clown!
If Bloomberg was even a semblance of competent when it comes to synthesizing the mind boggling number of decent articles they publish into a much smaller (but still huge) quantum of high-quality articles, it’d be the single-best media outlet on the planet. The amount of information they’re able to gather and communicate intelligently is astounding, but they never quite manage to publish articles on par with FT, let alone the Times or something like The New Yorker, despite having access to every conceivable dataset on the planet and despite their formidable roster of reporters. They don’t have any “stars,” per se, but they have hundreds of capable journalists who seem to be confined to a pretty strict template, which prizes conciseness over every, single other consideration. That’s enormously helpful to busy finance professionals who can gather more discrete, individual bits of information in an hour on Bloomberg than they can in 12 hours reading FT, but I personally think it holds them (BBG) back on the media side. I imagine it costs them a tremendous amount of talent. No journalist is going to stick around forever if they’re confined to a cookie cutter, even if it’s the best cookie cutter on the market.
Joe Weisenthal seems like he deserves an exception here!
Joe (and Tracy) are an exception. Sort of. But there again, they’re summarily relegated to the back page, and although I imagine they were probably involved in the branding process, it says a lot about BBG’s view of their work when their segment is called “Odd Lots” and only gets top billing when Tracy can convince Zoltan Pozsar to dial in.
Totally agree. Well said.
Bloomberg does have a governed approach and that formula by extension sometimes begets an irritating but seemingly routine line when speaking to individuals on their exceptional guest roster typically by the way of interrupting; “so are you going to make some news here”. I perceive it as some sort of fluff that can restrict the flow of information on that particular topic from that particular individual, immediately. Having said that, BBG it is the only financial news i listen to or watch. Well except for occasional Saturday PBS Consuelo Mack Wealth Track.
Populists at the helm of the printing press, i cannot wrap my head around the potential outcomes.
If a macro were to calm down (let’s say a truce in Ukraine – after they kick the russians out), and oil/gas were somehow flowing (at least for a more predictable market), and inflation dropped back down… would that make Transitory true (just on a larger timeline)?
And just like nordic NATO expansion was a wonderful own-goal, would these urgent hikes popping Crypto and maybe Chinese real estate bubbles actually be the desired outcome – despite how messy it was to get there?
I was/am on Team Transitory so I think I can speak to your first point.
I think it still counts as a loss because most of the Transitory narrative was based on the idea that supply sided snags and COVID related demand adjustments were going to get solved sooner rather than later.
As it happens, a fair bit of inflation is driven by excess demand (fiscal, supported by monetary). That too is (likely) transitory inasmuch as governments have turned off the spigots AND we haven’t see a wage price spiral take hold but this wasn’t the initial narrative and so we can’t claim victory.
Yeah, I mean, there’s still an argument to be made that “Of course it’s transitory!” in the sense that unless you believe DM inflation is going to run ~8-9% in the interim period between, say, 2024 and our eventual reckoning with all kinds of existential threats, inflation will come down in the developed world, even if it settles ~two percentage points above where it was during the Great Moderation. But it’s far easier for us to make that case here, in the safe confines of the comments section of a website, than it is for Powell to push that line during an FOMC press conference, while speaking to an irritable American public.
For sure.
TBH, I think Powell is doing as well as he can given the renewed paralysis of Congress/the fiscal side of things. Not to mention that, while raising taxes is a theoretical tool to cool off things, in practice, politicians are very unlikely to use it.
And, given that I too did not foresee the second stimulus package being so inflationary, I’m a little hesitant to throw stones at Powell for not hiking earlier.
So, yeah, we are where we are and, apart from sounding confident inflation will come down, I don’t think Powell can do much but hike 75 bps next week.