Agreed. My guess has been that they didn’t want a market meltdown to short circuit the process of normalizing rates. (They were trying to avoid a replay of 2018, in other words.) At 5%, I think they’d be more comfortable with it, but am not sure Powell will go so far as to encourage it. We’ll find out soon!
100%. But they got SPX down to 3600, tried to keep it there through the end of 2022, then gave up. Now they get panicked on every -3% move. Very, very odd.
Great read - I don’t expect Powell to be dovish, but will be surprised if he’s that hawkish. If he is, perhaps it’ll do enough damage to mitigate the need for more rate hikes, which might be preferred.
It’s been amazing they haven’t leaned on the asset market “damage” channel more so far. I don’t get it. They have this strange view they can keep asset markets stable while narrowly targeting inflation via rate hikes.
So if they finally choose that route, it’s about friggin time.
Agreed. My guess has been that they didn’t want a market meltdown to short circuit the process of normalizing rates. (They were trying to avoid a replay of 2018, in other words.) At 5%, I think they’d be more comfortable with it, but am not sure Powell will go so far as to encourage it. We’ll find out soon!
100%. But they got SPX down to 3600, tried to keep it there through the end of 2022, then gave up. Now they get panicked on every -3% move. Very, very odd.
Great read - I don’t expect Powell to be dovish, but will be surprised if he’s that hawkish. If he is, perhaps it’ll do enough damage to mitigate the need for more rate hikes, which might be preferred.
It’s been amazing they haven’t leaned on the asset market “damage” channel more so far. I don’t get it. They have this strange view they can keep asset markets stable while narrowly targeting inflation via rate hikes.
So if they finally choose that route, it’s about friggin time.