As we have stated for quite some time, the Federal Reserve has been far too complacent post COVID with removing accommodations. Well today will see the first real salvo in their attempt to regain confidence from the masses in regards to fighting inflation. We knew this point was inevitable and the 700+ egg head PHDs at the FED will now scramble to figure out just exactly how far behind they are and how far they will have to go.
Our estimate here is that this is a good first step but there will be more pain to come especially for the US consumer. We suspect the higher rates are going to kick off the start of the recession and Q2 will be the beginning. In fact GDPNow is now predicting just that:
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