here we go! the market trying to ignore more bad signs for the FED like 10.8 MILLION want ads, an ADP report showing 240,000 added this last month, and Powell finally having to make crystal clear his job is far from over. Why he likes to placate the market with hints of 25 basis point moves is beyond me. Pain now or later. I suspect the rest of the next 10 trading days will be more of the same, GLARING TRUTH that inflation is not only here but likely to get worse before it gest better. I know with certainty this economy will not be able to survive with a 6% fed Funds rate. the street knows this and is desperate to give a narrative we will stop short of that. My Number ONE inflation spiker is CHINA! they will put us over the TOP on inflation and it already started. People use the early 80's as a reason markets could thrive in a high inflation environment. I Agree! had the situation been different. We survived and thrived due to opening up the spigot on debt, starting from a stagnant economy in the 70's, housing just getting started as the best investment vehicle, speculative bets no where near todays, investment community that didn't have disinflation for the prior 40 years and use that to make extended loans and cheap repayments.
So far Bitcoin and DOW barely holding the line here. The US Dollar and 10 year yield refusing to breakout but inching ever closer. The notion that we are in a LONG inflation CYCLE seems lost on all investors and analysist. Plunging us into a spiking inflation is like jumping into tha Atlantic in the dead of winter. Having same affect since a whole generation (40 years) only knows disinflation and how it helps the stock market thrive. in fact I dare anyone to look at the whole history of the stock market and explain away the parabolic move we see since disinflation took hold. Astonishing performance even with a world mortgage debacle, dot.bomb, pandemic etc... While the move is straight up these last 40 years so is th dramatic drops in an always "V" shaped recovery. Lets not talk to a tax accountant on the health of the US Government for they will defer to the idea that they are someway different. they can max out 120 credit cards and add 50 more with no consequence. At some point CREDITORS will BALK. They will realize the system is fatally flawed and refuse to lend or ask for more collateral and higher payments.
