25 bp hike, #Fail
The FOMC decided to raise rates today by 25bp and this was widely expected, however, we would have hoped for more resolve, guess not. Well if this is going to be the projected slow walk path, expect nothing to change other then time. The same misallocation of capital, the same speculative fervor on the heels of the FED Put and nothing more than time wasted. Inflation imbalances will continue and it is this situation that the FED needs to tackle, not pussyfoot around with weak 25bp hikes from an already artificially low zero bound. Here are the bullet points shamefully taken from Zerohedge:
Fed Raises Funds Rate Target Range 25 Bps to 0.25%-0.5%
Fed Signals 6 more hikes in 2022
Fed Says Inflation Elevated, Cites Broader Prices Pressures
Fed Says Ukraine War May Create Inflation Pressure, Slower Growth
Fed Forecasts Rates at 2.8% End ‘24, Long-Run Cut to 2.4%
Fed Median Forecast Sees Inflation at 4.3% End 2022, 2.7% 2023
Fed Median Shows Unemployment at 3.5% End 2022, 3.5% End 2023
Fed Raises Ior 25 Bps to 0.4%, Discount Rate Increased to 0.5%
Bullard dissented, opting for a 50bps rate hike! YES HE IS RIGHT!!!
James Bullard, who preferred at this meeting to raise the target range for the federal funds rate by 0.5 percentage point to 1/2 to 3/4 percent
The equity markets were well bid going in and gave up some ground, but no doubt will slow grind on the heels of the FEDs weak impetus.
Who expects inflation??? Its Putin’s fault right, oh wait what’s this chart:
When the FED tells you that they will curb inflation, what they really mean is that they will curb the masses from having any say so in any matters what so ever. Inflation doesn’t hurt the ultrawealthy, it enriches them and its why you see the Fed Balance sheet above and its why you see this chart below:
Sorry the data doesn’t lie and thus the FED once again failed in doing their true job today and is further evidence, their only real mandate can be identified in the data presented in the charts above. Plain as day, crystal clear…CONCENTRATE WEALTH AND CREATE THE ILLUSION OF PROSPERITY.
Equities, especially the Nasdaq, right on cue, avoided disaster at 13000 feet and all the worlds problems are over, as the NQ is up 400+
Till next time…
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