over9k
So I didn't tell my wife, but I...
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@macca here's some food for thought:
Another musing:
The fed doesn't use the CPI, it uses the PCE index. That's absolutely plummeted in response to omicron. Consumer discretionary is the worst sp500 sector at the moment. Might cause some kind of policy pivot (might).
Classic case of superior goods getting pounded first when money actually gets tight. With that being said, when energy et al prices shoot up, PCE numbers might shoot up anyway on account of consumers having no choice but to pay big money for some things (like heating oil).
There's also the simple fact that a lot of the stuff like laptops, furniture, kids' toys etc that were flying off the shelves and on back order for weeks/months at the start of the pandemic have already been bought now, so there's not a great deal left for consumers to actually spend their money on if they can't go out & do things.
Forward guidance and minutes suggests they've already committed to tapering etc but that was before omicron hit the worst numbers of the pandemic we are now seeing.
Point is, a policy pivot isn't totally out of the question with this omicron variant now. It kind of depends on the drop in discretionary spending vs what will undoubtedly be a huge bump in consumer staples/core inflationary goods (like energy). I need to look into the weighting of the PCE to have a better idea of what to expect.
If anyone knows the weightings of the PCE off the top of their head then post them up because that'll save me some time finding them.
Nasdaq down another 1.8% as of this posting.
Another musing:
The fed doesn't use the CPI, it uses the PCE index. That's absolutely plummeted in response to omicron. Consumer discretionary is the worst sp500 sector at the moment. Might cause some kind of policy pivot (might).
Classic case of superior goods getting pounded first when money actually gets tight. With that being said, when energy et al prices shoot up, PCE numbers might shoot up anyway on account of consumers having no choice but to pay big money for some things (like heating oil).
There's also the simple fact that a lot of the stuff like laptops, furniture, kids' toys etc that were flying off the shelves and on back order for weeks/months at the start of the pandemic have already been bought now, so there's not a great deal left for consumers to actually spend their money on if they can't go out & do things.
Forward guidance and minutes suggests they've already committed to tapering etc but that was before omicron hit the worst numbers of the pandemic we are now seeing.
Point is, a policy pivot isn't totally out of the question with this omicron variant now. It kind of depends on the drop in discretionary spending vs what will undoubtedly be a huge bump in consumer staples/core inflationary goods (like energy). I need to look into the weighting of the PCE to have a better idea of what to expect.
If anyone knows the weightings of the PCE off the top of their head then post them up because that'll save me some time finding them.
Nasdaq down another 1.8% as of this posting.