by GME_200K
What happened today with the SPY is a big middle finger to the fed.
Basically, markets already priced in a 50 bps hike in March. The fact that they stayed the course means this was a DOVISH development.
Markets are now pricing in the fact that the fed will start EASING in 2023….in other words, they don’t buy that jpow has the guts to fight inflation. We will get a max of 1 rate hike before the fed bends like a reef in the wind and grabs their ankles for daddy SPY.
In order for markets to take the fed seriously, they would need to surprise to the upside and deliver a 75 bps increase in March, or an emergency rate increase before then.
Think about it: 1970s inflation, shrinking labor force, and supply and demand mismatches that are fucking our supply chains.
And the fed is still buying bonds through QE.
TLDR: inflation is how governments die. If you don’t trust me, trust this old dude:
“Inflation is a very serious subject,” Berkshire Hathaway Vice Chairman & Daily Journal Chairman Charlie Munger says. “You can argue it’s the way democracies die.” More: pic.twitter.com/mZsNhmSmIC
— Yahoo Finance (@YahooFinance) February 16, 2022