It is somewhat amusing to see the growing chorus of Pollyanna crybabies begging the Fed to stop raising rates and, yes, even to lower them again. Here’s the latest: ‘The economy will crumble’: Another billionaire investor calls on the Fed to pull back its interest rate hikes (msn.com)
And although I am well aware of the lag effect of rate changes, and I do believe we are in for some trouble down the road, right now the economy is doing great. Employment is the highest it has ever been. The unemployment rate remains close to the lowest it has ever been. Wages are growing at a rapid clip (albeit, still not keeping up with inflation). For Hire posters are still there in just about every retail establishment I walk into.
No, the cry babies are the rich people, the billionaires and others who have been hurt by the market debacle of 2022. They want the party to continue because they are doing just fine keeping up with inflation, thank you. Who profited from the Fed’s unprecedented nearly 20-year free money spree? Rich people. Hedge Fund managers, bankers, billionaires, crypto weirdos, etc. Makes me sad.
Keep Raising, Sell the Rip
The Fed will (just maybe) raise rates to a normal historical level and keep them there. At least they have all said as much. I hope they stick to it.
In the meantime, I don’t think this bounce will last. Yes, I told you to buy on Monday and if you did, you are having a nice week. I am already out of that position, however, as the factors in place for the bounce are already receding: bonds have started to slide again, sentiment (very transient, this one) has gotten less negative, and the hope that the Fed will stop is just that. Hope. Friday’s jobs # will be interesting. I just don’t see it being bad. It will be good (for little people), bad for markets, and the bear continues.