Quote:
Originally Posted by Chick Webb
A lot of people much, much smarter about this stuff than both of us disagree. Up 'til Friday the odds of a 0.75% increase were about 25%. By the close of the market on Friday they were 100%. And, do you really think Timiraos, the WSJ reporter who published that, would have risked his career by making it up?
The Fed is required to control inflation to the extent they can; it's literally their charter. They can't just sit on their hands when inflation is busting through 8%. So, they must do something to destroy demand, and raising interest rates will do that. The current target rate, which is what is driving the market (remember, forward looking), is 3.8%, not 1.5%. That's expected to be reached next spring. Unfortunately for the Fed they waited too long and now they're raising into an economy that's slowing because of the price shock oil has delivered. That's why the concern about stagflation.
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You are going have to explain a little better how last time around the FED said absolutely no chance of a 75 bps rate hike and the market rallied... then some random reporter says something a little early and the market rallies on the same news when it was completely unexpected... my dude we are 700 points down today... perhaps the fake pump wore off? Also journalistic integrity hasn't existed for close to 30 years... so yea.