Why equities went up despite a 50bp hike, it's not just because you bought puts [GS Research]collarsandchains OP t1_iyf021f wrote
Reply to comment by MomentSpecialist2020 in Why equities went up despite a 50bp hike, it's not just because you bought puts [GS Research] by collarsandchains
Shipping rates and the hot labor market were driving inflation through the roof, both have eased, they should (as they are) ease off the brakes as that's happening. The Fed's mandate isn't to stop inflation by crushing the economy, it's to keep inflation under control.
MomentSpecialist2020 t1_iyf0tr7 wrote
Just watch. Oil and natural resources are scarce. That will drive inflation higher. Speculation in real estate and stocks will resume driving inflation higher. Inflation has a psychological part, FOMO etc. People are scared. Shortages of food, gas, diesel, etc. will drive people to hoard.
collarsandchains OP t1_iyf1n9h wrote
In the long run you're right, but you know what they say about the long run...
We aren't there yet.
mnelso32 t1_iyf6cpk wrote
Labor market is still very hot. See this thread:
collarsandchains OP t1_iyfazqj wrote
The market remaining tight isn't the same thing as it staying as hot as it was. More to the point, freight costs (in part pushed up by fuel costs) and commodity prices (oil/grain) are no longer being pushed up the way they were six months ago by Putin's invasion of Ukraine. There's no one factor that was pushing up inflation but the sum total of the factors that were pushing it up are not as intense as they were when Powell slammed the brakes on the stock market and pushed AAPL down to 130.
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