Unfinished Business
The Fed wants "substantially more evidence" that inflation is on a sustainable path lower.
That was the overarching takeaway from Jerome Powell's press conference on Wednesday, when the Fed capped a difficult year with a 50bps rate hike.
Suffice to say that although the Committee was just as pleased as the next guy and gal with consecutive downside surprises in the CPI series, it's not near enough. The Fed isn't pondering a pause at this juncture.
Read more: When Doves Try
Powell seemed some
The main thing I took away from Powell’s presser was that the FOMC believes a significantly weaker labor market will be needed to bring inflation to 2%; that goods and housing deflation will not be enough.
Yeah, we don’t want our serfs to make more money. All these geniuses at the Fed need to try living on $13.50 an hour, part time, for a few months. There are other solutions. Even Walmart has figured that out.
I watched the press conference. Hoping someone would ask him if he or the committee was concerned about the inverted UST bond yield curve including 3 months – 10 years which he has previously spoken of indicating tightness of policy if inverted (it is). Or if he and the committee were concerned that real time measurements of prices were going up much more slowly in the last 6 months- since rate increases over the last year are likely just as misleading as looking at the last two months (the Fed has only been tightening 9 months). Were they concerned about the fact that housing prices and rents are lagging indicators in prices, and employment is a lagging indicator for growth? These are two of the metrics the FOMC seems concerned with and yet these are rear view mirror indicators. I am going with the financial markets here- the FOMC is going to have to do a quick about face next year unless something dramatic changes soon for the better. At this point a soft landing/ mild recession appears to be whistling past the graveyard….
How quickly are openings and new jobs going to tank after the holidays? Dibs on very.