Loading ...PIVOT!
Picture Jay Powell with a bowl on his head and egg dripping down his face. He tightened until he broke something. The whole financial system. First crypto and now the whole banking and financial system are about to implode. The bullshit about going back to 50 basis points is out the window. He will be cutting rates at the March meeting and maybe even at an emergency meeting on Monday morning as all hell is likely soon. PS: If the job number comes in weak, gold could rocket between $50-$100 today!
A pivot now is simply delusional.
Based on what? If the quadrillions of derivatives are going to cause a financial system meltdown you don’t think the FED will do what it has always done before? I may be wrong that such a meltdown is right in front of us, but you are the one who is delusional if you think they won’t do what they have always done before when faced with the abyss.
They could stop hiking, but the FED is all about maintaining their so called “reputation”. An immediate pivot would simply further blow up their reputation after their transitory fiasco. They would rather do things behind closed doors such as secretly inject money.
Agree that secretly injecting money is more in line with how they operate and also more effective than cutting rates as far as an immediate effect on a liquidity crisis. That still is a pivot but you are correct it may allow them to think they are saving face while any objective observer knows they misjudged the situation and went further then they should have in order to support the dollar and suppress gold.
The FED is so far down the rabbit hole I can’t see how they can end up being in a righted ship. 20 years of manipulating interest rates and 15 years of QE has so distorted the economy and made it vulnerable to interest rate shocks will ultimately lead to a depression and collapse. Meanwhile the Pavlovian response of market participants has not yet been reversed. I think the only thing that CAN reverse it is that actual collapse when ever it comes.