The One Word That Matters In The New FOMC Statement
The Fed kept rates on hold Wednesday, as widely expected.
There was no chance of an increase. Officials spent the better part of October explaining how and why the rapid rise in long-end US Treasury yields witnessed since early August could theoretically stand in for a rate hike, or anyway assist the Fed in its efforts to curb demand and cool the economy.
Jerome Powell effectively ruled out a November increase during remarks to the Economic Club of New York, even as he simultaneously emphasize
This is good- in the reall world the longer tem cost of money is meaningful. I think that we had qe and rate uppression for a very long time. Younger traders have a lot of recency bias. Private equity and related institutions have reached critical mass as a percentage of economic activity. These are non reporting entities. So lots more data, but I would argue it is lower quality. The upper 20% had a great covid and their assets were on miracle gro. They don’t have tangible evidence that they are giveing those gains back yet. I think the other 80% are living a adifferent country with a different economy. It s time to use the term political economy. Now that we have EM levels of economic inequality we are at risk of electing a fascist gangster will want to destroy our institutions. As always, the next question is when will this stuff show up? Sitting and waiting, there is the art….
Oh, and I Ieft out war-Russia/Ukraine, Israel/hamas, hezbollah, Iran. Armenia/ Azerbaijan, Serbia/Kosovo- this plus climate change threaten the world food supply wihich will ignite more war.