Thread by @biancoresearch

1/13

How big a deal is inflation? Some new news this morning.

In Washington this is big deal for Biden and his 2022 agenda.

wsj.com/articles/manch…

2/13

Manchin has cited a range of reasons for Democrats to not forge ahead with their ambitious package since the summer, urging a "strategic pause" since August.

But inflation is at the top of his list.
nbcnews.com/news/amp/ncna1…

3/13

Manchin even cited Powell's testimony about inflation.

Do not underestimate the impact inflation is having on the 40% that rent and have little to no savings.

This is why we get this incredible position by a political party

They want rate hikes!

ft.com/content/1ae49b…

4/14

More from Manchin

"I've always said this Brett, if I can't go home and explain to the people of West Virginia I can't vote for, and I cannot vote to continue with this piece of legislation. I just can't," Manchin, a key centrist, said on "Fox News Sunday."

5/13

WV is one of the poorest states. So, Manchin should be all for this because it will give assistance the poor.
Yet he says he can’t explain it to them. He was the governor of West Virginia and he’s now the senator of WV. He knows the people of WV.

6/13

So let me interpret Manchin's rationale.

When he goes back to WV, they are screaming at him about inflation. They see the price of everything going up, and want it to stop, now!

He’s afraid if he votes for BBB and even higher inflation follows, he is out of office.

7/13

This is Manchin sinking his party most important priority.

It is easy to give unthinking partisan explanation and insult him. Don't, it only reflects poorly on you, not Manchin.

Instead, Manchin is telling us what the biggest issue is ... inflation!

Pay attention!

8/13

This supports my thesis that something has changed, and that’s inflation.

The Fed can’t just print forever and bail out the stock market forever because inflation now gets in the way.

If the Fed does not address inflation the Democrats are in BIG trouble next November.

9/13

For the last 13 years this was never a problem, the economy/markets get wobbly, Fed prints, markets go up, inflation does not materialize. Everyone wins.

Now with inflation back, this is not the case anymore.

10/13

So, the Fed has no choice, they have to address inflation by aggressively raising rates, at least as much as the market is pricing and if not MORE.

At the same time the consensus overwhelmingly believes the Fed will do LESS than what the market is pricing in.

11/13

The majority of guests on financial TV believe the Fed will never upset the stock market.

They don’t realize is the game has changed because of inflation. It is hurting a bigger constituency than the stock market right now, the poor suffering from it.

12/13

If the Fed has to sacrifice stocks to rein inflation to calm the ire of the poor before Nov, so be it.

The public already thinks the economy is bad. Consumer confidence is at a 10-year low now!

Lower stocks are not changing the public's opinion of the economy. It sucks!

13/13

The alternative, the Fed stays easy, stocks >20% and inflation stay hot.

If you think inequality is a problem now, tell the poor they have to keep paying more so the rich can watch their portfolios keep going up.

The Ds get it, which is why they want the Fed to hike!