We're definitely living in an extraordinary time. Powell has obviously lost the battle against inflation. He has probably another 25 to 50 basis point hike, but that isn't going to fix anything near term. Inflation is still red hot and everything has gone up so much in the last few years.
I personally don't know how and when this is going the end, but I have a bad feeling that it won't end well. Perhaps something like 2008/2009 when one can pick up an 360 for $65K.
Sorry for the off topic discussion...
Quote:
Originally Posted by vtec to vvel
Historically, each time the Feds have previously tried to fight inflation, it always resulted in a recession.
The current economic state is a different scenario and COVID19 had a significant influence on this. It all comes down to supply. IMO, rate hikes, QT's/QE's, a recession will not resolve the current economy. The goal of the rate hikes is to discourage borrowed spending and subsequently lower demand, which also in turn lowers employment. Why do you think employment hasn't gone down even with the significant frequency of rate hikes? Why you do you think inflation hasn't cooled? The demand is still very much there, but the supply is severely lacking, so employers/companies are still in production mode with what materials they have available (hence why the employment rate isn't being lowered).
My biggest concern is that we could be headed for a stagflation at this rate.
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