FED FUND RATE NOW 5% NEGETIVE TO INFLTION
MMT Says "PRINTING FOR THE PEOPLE'S ECONOMY"
I don't think the people like 5% inflation.
KEEP PRINTING!
I don't think the people like 5% inflation.
KEEP PRINTING!
Comment:
While today's pause by the #FOMC may seem "data dependent". It really wasn't.
Back on June 2021, I posted this time-stamped inflation-adjusted dynamic FED FUND RATE chart.
Like magic! It got worse before it got better as expected & now the FED paused as expected exactly at that key area. (click the play button to see the results)
It's like MAGIC!! Except that, it's not. It's just basic financial, monetary, and economic understanding. Free from me to you thx to trading view.
Back on June 2021, I posted this time-stamped inflation-adjusted dynamic FED FUND RATE chart.
Like magic! It got worse before it got better as expected & now the FED paused as expected exactly at that key area. (click the play button to see the results)
It's like MAGIC!! Except that, it's not. It's just basic financial, monetary, and economic understanding. Free from me to you thx to trading view.
Comment:
BTW this post only got exactly 6 likes from the time I first posted it. hahah!
As I always tell you I will always do my best to give you the absolute best most accurate analysis (without BS cute stories) that I possibly can.
If you are looking for an English major or marketing guru you won't find it here.
As I always tell you I will always do my best to give you the absolute best most accurate analysis (without BS cute stories) that I possibly can.
If you are looking for an English major or marketing guru you won't find it here.
Comment:
Back in June 2021 I was pointing to the fact that the FED real rates had collapsed down to negative 5%. It continued lower to negative 8% before the FED finally started to raise rates.
Today we are at plus 2% into the money-tightening territory.
Why does this matter? Well, this chart was screaming short bonds for starters. Higher rates = lower bond prices.
2. Most in 2021 were saying inflation was "transitory" Obviously it wasn't. Anyone who looked at this chart knew it. Higher rates were required.
3. The other silliness of people running around saying "The probability of a rate hike..." was just dumb. Great for marketing and entertainment but in reality every month there was a 100% chance of a rate hike at least till we hit a neutral real rate. As such the market tanked and tanked with every new rate hike as if it was a "surprise".
4. The reverse is happening now. "The FED will pause...." and they cheer as we come near the end of the FED hike cycle. BUT! Why do they think that is good and buy buy buy? This is also a mistake. Why? Once the rate hike ends the economy usually deteriorates which is followed by lower rates to "stimulate" the economy. That means companies will start to suffer along with the economy. Revenues and EPS will start to fall as unemployment and wage loss rises as tax revenues fall. What do you think stock prices will do? Rise? LOL! Good luck with that.
I know most on trading view just want the trade. Everyday day after day. But that is wrong in my view. Understanding the macroeconomics behind it all is very, very important. I think this seemingly silly little chart shows you why the macro with the charting is a very powerful combination.
Of course, silly little boys and girls will argue that RSI, MA, MACD, backtesting, scripts, candle sticks, Elliot wave counting, FIBS, sentiment, put/call ratios blah blah are better than learning real macroeconomics. I strongly disagree.
To each his/her own I guess.
Today we are at plus 2% into the money-tightening territory.
Why does this matter? Well, this chart was screaming short bonds for starters. Higher rates = lower bond prices.
2. Most in 2021 were saying inflation was "transitory" Obviously it wasn't. Anyone who looked at this chart knew it. Higher rates were required.
3. The other silliness of people running around saying "The probability of a rate hike..." was just dumb. Great for marketing and entertainment but in reality every month there was a 100% chance of a rate hike at least till we hit a neutral real rate. As such the market tanked and tanked with every new rate hike as if it was a "surprise".
4. The reverse is happening now. "The FED will pause...." and they cheer as we come near the end of the FED hike cycle. BUT! Why do they think that is good and buy buy buy? This is also a mistake. Why? Once the rate hike ends the economy usually deteriorates which is followed by lower rates to "stimulate" the economy. That means companies will start to suffer along with the economy. Revenues and EPS will start to fall as unemployment and wage loss rises as tax revenues fall. What do you think stock prices will do? Rise? LOL! Good luck with that.
I know most on trading view just want the trade. Everyday day after day. But that is wrong in my view. Understanding the macroeconomics behind it all is very, very important. I think this seemingly silly little chart shows you why the macro with the charting is a very powerful combination.
Of course, silly little boys and girls will argue that RSI, MA, MACD, backtesting, scripts, candle sticks, Elliot wave counting, FIBS, sentiment, put/call ratios blah blah are better than learning real macroeconomics. I strongly disagree.
To each his/her own I guess.
Real Macro Economic Investing
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www.patreon.com/Realmacro
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