Inflation

[over9k]

Anything that markets respond to is relevant IMO. Whether you/I think they're doing so rightly or wrongly is a different thing.

 

[InsvestoBoy]

Anything that markets respond to is relevant IMO. Whether you/I think they're doing so rightly or wrongly is a different thing.

I wish you and all the others hanging on to the words of the likes of Mr Powell all the luck in the world.

 

[over9k]

I wish you and all the others hanging on to the words of the likes of Mr Powell all the luck in the world.

When did I ever say I was doing that?

If markets want to go mental based on a bit of data or a fed comment and I can hop on the hype train and bail before everyone realise how dumb doing so actually was then all the better.

 

[Smurf1976]

Suppose that the Fed makes an announcement next week that they've got some new information and based on that, they now think that further rate rises are unlikely.

Anyone think that wouldn't see the markets take off like a rocket?

They're relevant yes. Their impact isn't zero.

 

[waterbottle]

I don't think anyone can deny the when JPow and Fed speaks, the market moves. They're very relavent.

That doesn't mean they're effective at managing monetary issues.

 

[divs4ever]

“We wouldn’t…try to crash the economy and then clean up afterwards,” Chairman Powell recently remarked. “I wouldn’t take that approach at all.” Yet that is, in fact, what every other Fed Chair has done during predictable yield‐curve‐inversion recessions.



In October I wrote, “CPI Less Rent Was Zero for 3 Months; CPI Rent Is Wrong.”
Nobody appeared to find that interesting.
Now, CPI less rent has shown zero inflation for 5 months.
How long can zero remain uninteresting?
Some prices went up over the past five months and others went down, but the weighted average increase for everything in the average consumer’s shopping basket was nil once we properly exclude disingenuous and outdated estimates of shelter inflation.

Not sure if this guy is right on the second comment but the first is on the money and I expect it will occur again.
Forced hard landing either by design or ineptitude.

https://www.cato.org/blog/history-cautions-against-loosening-fed-policy-too-late-3

does that mean he intends to succeed at crashing the economy , or he has no intentions of helping in the clean-up ??

sounds more like the CPI calculation was wrong , maybe the basket was heavy in crypto-tokens

 

[over9k]

I don't think anyone can deny the when JPow and Fed speaks, the market moves. They're very relavent.

That doesn't mean they're effective at managing monetary issues.

Whether it's wise for markets to react like this is another question. As best I can tell, instevo thinks it foolish.

To my mind, the fed becomes irrelevant when markets conclude it has lost control. Doesn't mean it hasn't already, but if markets don't think it then...

 

[Smurf1976]

does that mean he intends to succeed at crashing the economy , or he has no intentions of helping in the clean-up ??

I take it to mean they're going to do exactly what they've said they wouldn't try to do.

Whilst I'm cautiously optimistic about the market in the very short term, the rest of the year, I think the Fed's communicating a clear message about what's ahead here. They're going to crash the economy and probably the stock market as well.

 

[InsvestoBoy]

Suppose that the Fed makes an announcement next week that they've got some new information and based on that, they now think that further rate rises are unlikely.

Anyone think that wouldn't see the markets take off like a rocket?

They're relevant yes. Their impact isn't zero.

Assuming that scenario occurred, so what exactly? How does it make the Fed relevant?

Some first order thinkers thought "rate hike pause good, buy stonks" and from this we are supposed to infer the Central Bank is relevant? What if the next day second order thinkers come along and say "wait, what's happening in the real economy and monetary system that CB thinks they should pause, sell stonks"? Does that reduce their relevance to you?

The Fed doesn't manage the S&P500, they are supposed to manage money. The marginal response of some misguided market participants in some decidedly not "moneyish" market does not make CBs relevant.

 

[waterbottle]

Assuming that scenario occurred, so what exactly? How does it make the Fed relevant?

Some first order thinkers thought "rate hike pause good, buy stonks" and from this we are supposed to infer the Central Bank is relevant? What if the next day second order thinkers come along and say "wait, what's happening in the real economy and monetary system that CB thinks they should pause, sell stonks"? Does that reduce their relevance to you?

The Fed doesn't manage the S&P500, they are supposed to manage money. The marginal response of some misguided market participants in some decidedly not "moneyish" market does not make CBs relevant.

You've just defined their relavence.

 

[divs4ever]

to ascertain Fedspeak to relevancy one should remember some HFTs have automated analysis using 'keywords in statements/announcements and the computer trade on that before human traders can react ,

so the question should probably be about the ( human ) traders do they instinctively ride the trend ( created by the HFTs ) or trade counter to the initial reaction , now given Jerome's CV ( before the Fed job ) what is the chances of deliberately planting 'keywords ' ??

 

[Smurf1976]

Assuming that scenario occurred, so what exactly? How does it make the Fed relevant?

Relevance has nothing to do with competence or being good or bad.

Someone who interjects at a theatre performance has added nothing of value to it but they're relevant to the experience of everyone else watching it yes, indeed they'll likely be what others remember most about the whole thing.

The S&P500 is now down 4.8% from its value shortly prior to the Fed announcement and whilst it remains to be seen, it's at least possible that they've reversed the medium term direction of the market.

There'd be very few others on the planet who could trigger a move anywhere near that scale, indeed most traders and even banks couldn't move the index by any measurable amount at all. However relevant they are or aren't, they're far more relevant than 99.9999% of others.

 

[over9k]

What if the next day second order thinkers come along and say "wait, what's happening in the real economy and monetary system that CB thinks they should pause, sell stonks"?

Yes and in the meantime you've sold on the day the first order thinkers were losing their collective minds in response to the fed comments like the degenerates that they are.

Anything which moves markets is relevant to positioning. Anything.

 

[over9k]

Meanwhile, lol, look at the markets today.

Today is a perfect example of what I'm talking about:

 

[Knobby22]

This short term stuff is all automated computer trading with trigger words.
If a human punter wants to take that on then watch out.

 

[InsvestoBoy]

Yes and in the meantime you've sold on the day the first order thinkers were losing their collective minds in response to the fed comments like the degenerates that they are.

Anything which moves markets is relevant to positioning. Anything.

Again, wishing you and all the others who hang onto the words of Central Bankers all the luck in the world.

 

[over9k]

Again, wishing you and all the others who hang onto the words of Central Bankers all the luck in the world.

Again, when did I ever say I was doing that?

 

[InsvestoBoy]

The S&P500 is now down 4.8% from its value shortly prior to the Fed announcement and whilst it remains to be seen, it's at least possible that they've reversed the medium term direction of the market.

There'd be very few others on the planet who could trigger a move anywhere near that scale, indeed most traders and even banks couldn't move the index by any measurable amount at all. However relevant they are or aren't, they're far more relevant than 99.9999% of others.

@Smurf1976 you are a smart guy...I dunno why you say things like this. The Fed did not reverse the direction of the market. Those traders and banks who you say can't move it by any amount are the very ones who have done the thing you said they can't do.

 

[over9k]

@Smurf1976 you are a smart guy...I dunno why you say things like this. The Fed did not reverse the direction of the market. Those traders and banks who you say can't move it by any amount are the very ones who have done the thing you said they can't do.

Yes and they did it in response to fed actions/comments. How are you not getting this?

 

[InsvestoBoy]

Yes and they did it in response to fed actions/comments. How are you not getting this?

You think they did, but you have no evidence that this is the case. All the evidence from people who study how markets function shows the opposite.

If you knew more about how markets worked, you would realise you're wrong.

The resolution of event risk moves markets today just as it always has. Options dealers and market makers especially. It's the event and participants, not the content of the event that drives the price action. As a stylised simple example, let's say a lot of people were buying puts into the CPI print. After the CPI is over they no longer need the puts because the event has passed. Now the options dealers need to do a lot of trading to handle that flow. It's a lot of money. It shows up as price action for a few days. It doesn't mean anything.

Options dealers and market makers do not have a view on the Fed. They do not care.