by Chris Black
Here’s the news:
Read the FOMC’s December statement on faster taper t.co/c2vmjjYzQO
— MarketWatch (@MarketWatch) December 15, 2021
Here’s the deal:
They’re still going to pump-in tens of billions of dollars over the next couple months.
The big news, and the thing that will be gradually priced in, is uncertainty over raising rates. The fed basically keeps signaling that it can’t raise rates, despite the insistence that inflation needs to be addressed.
The FED’s mandate is to maximize employment, but raising rates will depress markets and push companies into default, both of which would have a big negative impact on hiring and retention.
There’s the consistent question of will-they-or-won’t-they, and each FOMC meeting that passes without a commitment on rates further affirms that they aren’t going to do anything for the foreseeable future.
You will see news sites memeing about definite rate hikes, but even the FED’s own projections are wildly uncertain because they don’t want to come out and say that raising rates is not possible
Stonks called the FED’s bluff – it’s going to be ZIRP forever. Screen cap this.