The Market is Weird

[NitroZ7]

Market goes up because the yield on the 10 year drops. The yield on the 10 year drops because the market believes we are going into a recession.

[boneil]

The sooner we go into recession the sooner we cut rates and bring back QE.

Next recession we get negative rates, can't imagine how high we will go then.

[NitroZ7]

The sooner we go into recession the sooner we cut rates and bring back QE.

Next recession we get negative rates, can't imagine how high we will go then.

The only question is whether the fed will cut if we go into a recession if inflation is still high. They will probably move the goal post to 3% for target inflation but if it 5-6% I think they may still keep tightening even if we are in a recession. Hard to know what they will do unless unemployment skyrockets.

[boneil]

yeah it probably all hinges on unemployment and inflation rate. They'll keep ratcheting up the rate hikes until one of them break. But looking at the recent moves in commodities, I think there's a good chance inflation has peaked. We might see softer inflation data, that could lead to only a .5 hike in July. Then the Fed just coasts for awhile to see how QT is affecting the markets.

I really don't fear the hikes. I fear the QT ratcheting up and the Russian war.

[NitroZ7]

yeah it probably all hinges on unemployment and inflation rate. They'll keep ratcheting up the rate hikes until one of them break. But looking at the recent moves in commodities, I think there's a good chance inflation has peaked. We might see softer inflation data, that could lead to only a .5 hike in July. Then the Fed just coasts for awhile to see how QT is affecting the markets.

I really don't fear the hikes. I fear the QT ratcheting up and the Russian war.

Yeah I think they at least need to get to 2.5-3% on the fed funds rate which would be around neutral. The market is pricing in 4% but we may not get there. I think they started late but it is good that they front loaded it.

[TampaJim]

Drunk driver ... first they speed, then go too slow, drift across lines, over correct, etc.
After awhile, they lose it. Cross over the center median, slamming headfirst into traffic.
Not saying this is the case, but I'm staying off the road. Wall Street has been partying.

[Bassmaster96]

Drunk driver ... first they speed, then go too slow, drift across lines, over correct, etc.
After awhile, they lose it. Cross over the center median, slamming headfirst into traffic.
Not saying this is the case, but I'm staying off the road. Wall Street has been partying.

Agree with this. It's random, sporadic, and doesn't make sense because it doesn't know what to do...not good