Russia/Ukraine Crisis and the Federal Reserve:
1) For now, crisis is more inflationary than disinflationary.
2) Timing couldn’t be worse; adding fuel to an already burning fire on inflation; risks of inflation becoming more entrenched just went up.
1) For now, crisis is more inflationary than disinflationary.
2) Timing couldn’t be worse; adding fuel to an already burning fire on inflation; risks of inflation becoming more entrenched just went up.
3)Those shifts in the absence of financial market turbulence make the Fed likely to follow through on rate hikes. But, we do have financial market turbulence.
4) What would cause the Fed to stop rate hikes and worry about financial markets more? A seizure in financial markets.
4) What would cause the Fed to stop rate hikes and worry about financial markets more? A seizure in financial markets.
5) A credit market seizure would be far worse than a Fed tightening, rate hikes - hoping that doesn’t happen.
6) Fed doesn’t have a good history of fighting inflation without going too far on rate hikes. They won’t know they have gone too far until it is too late.
6) Fed doesn’t have a good history of fighting inflation without going too far on rate hikes. They won’t know they have gone too far until it is too late.
7)Not clear can derail current inflation cycle without dampening demand and allowing supply time to catch up.
8) Hard for that to occur without rate hikes eventually taking a toll on employment and pushing unemployment up.
8) Hard for that to occur without rate hikes eventually taking a toll on employment and pushing unemployment up.
9) Risks of a boom/bust cycle are high.
10) There is eery resemblance to oil shock on heels of inflation surge in 70s. That has to scare Fed but nothing about this crisis has followed a script. Would love to go off script and see inflation come down without pain. Inflation🔥.
10) There is eery resemblance to oil shock on heels of inflation surge in 70s. That has to scare Fed but nothing about this crisis has followed a script. Would love to go off script and see inflation come down without pain. Inflation🔥.
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