Thread by @dmoses34

My thoughts into #FederalReserve meeting..let's recap:
Last Fed Meeting:Nov 3rd-Fed announces tapering to begin (as expected)
Nov 22nd:Biden nominates Powell for another term
Nov 30th:Powell testifies in Congress and indicates "transitory" is gone&may accelerate taper (cont'd)

This 11/30 testimony was in the wake of new COVID wave (Omicron)&investors assumed Powell would take note of that (didn't)
Yes,there is a #dotplot coming today (last one September)Fed Fund Futures have already done the work (2-3 hikes in 2021)1st hike late spring '22 (cont'd)

since 11/3:we have seen 2yr yields move from low .40's to high .60's & 10yr yields from 1.60's to 1.40's (2/10 spread narrowing dramatically); we have also seen several high inflation prints (CPI/PPI),low jobless claims & unfortunately a major acceleration in COVID cases (cont'd)

What does this mean? I would expect Powell to fully acknowledge risks posed by new COVID variant & backtrack a bit on his 11/30 testimony while acknowledging recent inflation data; what the market has been indicating (for years now)is that it fears an unaccommodating Fed (cont'd)

& that rate hikes will undoubtedly cause the economy to slow(see 10year yield)-#stagflation if FED is indeed behind but bigger fear they may overshoot & the market loses confidence in their ability to control inflation;It should scare investors that a market < than (cont'd)

3% (SPY) 5-6% (QQQ) off all time highs is this freaked out;proves that the #FederalReserve has been &continues to be the main driver of liquidity in this market;it's been this way for 13 years (QE 1 Nov 2008) & I look forward to a time when bottom up research will matter again