#PCE #Core #Inflation keeps rising.
Main indicator for the #FederalReserve when judging whether or not to continue raising #interestrates.
#Powell was quite clear in his speeches that they will continue raising "into pain" as long as price stability is not achieved.
🧵
Main indicator for the #FederalReserve when judging whether or not to continue raising #interestrates.
#Powell was quite clear in his speeches that they will continue raising "into pain" as long as price stability is not achieved.
🧵
https://twitter.com/GttgTrades/status/1575830411636224005
By "into pain", they are primarily referring to their dual mandate of price stability (#inflation) and maximum #Employment.
But there is not much pain showing up in the job market.
Last weekly jobless claims hit a 5-month low.
reuters.com/markets/us/us-…
But there is not much pain showing up in the job market.
Last weekly jobless claims hit a 5-month low.
reuters.com/markets/us/us-…
So to summarize, #TheFed has 2 jobs:
1. Reduce #inflation (not done)
2. Maximize #employment (done)
And they've been adamant about raising #rates until 1. is done, even at temporary setbacks to 2.
Unless they plan on pulling a #BoE, anything short of #75bps/#100bps is hopium.
1. Reduce #inflation (not done)
2. Maximize #employment (done)
And they've been adamant about raising #rates until 1. is done, even at temporary setbacks to 2.
Unless they plan on pulling a #BoE, anything short of #75bps/#100bps is hopium.
Of course, pulling from the other end is the fact that the #US simply cannot afford to allow long-term #bonds and #debt to roll-over at current #yields. There simply isn't the money to even service the interest, let alone the principal.
Truly, a no-win scenario.
Truly, a no-win scenario.
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