by Chris Black
Huge segments of the financial system were far too slow to position for Fed Rate hikes to 5%-6%.
They simply did not believe it would really happen.
They’ve instead positioned for a “Fed Pivot” that was to happen any day, and would yield great returns on their capital allocations.
Positioning for a Fed Pivot is the exact opposite of positioning for a Fed Rate hiking cycle and a “higher for longer” policy.
The same financial geniuses failed to position for prolonged inflation at the consumer level (Consumer Price Index, CPI).
They were convinced that inflation (as measured by CPI) was “transitory” and would simply go away on its own once the Covid Lockdown bottlenecks sorted themselves out.
Now these extremely highly paid (and greedy) retards are protesting that “nobody could have seen this coming”.
Jerome Powell at the Fed is doing exactly what he said he was going to do: gradually hike the Fed Fund Rate to 5%-6% range and keep it there for some time.
He’s said it at every FOMC meeting for almost two years.
If “investors” thought they knew better, that’s their problem.
American households have done no better.
They’re unbelievable poorly positioned for tightened lending standards, higher interest rates, and high inflation causing higher daily cost-of-living.
Many are facing looming financial catastrophe, are completely unprepared, and blame everyone and everything but themselves.