Macroeconomic View
December 2021 seems to be the end of this long lasting bull market.Markets affected by the inflationary easing policies followed by the FED, going back to the end of the subprime mortgage crisis, were blooming.
The rise of the NASDAQ100 is only an example of what happened due to boosting culture adopted by FED. This brings us to now.
What US is facing is the inflation rate rising, while interest rate hikes look like not being enough to pause this. The Ukraine-Russian war is something that adds on the energy crisis existing globally, even though it is not the only reason to blame for the rising on CPI .FED-among many countries- decided to counter COVID-19 loses with further easing providing money that correspond to no real product, and basically as Milton Friedman would point providing the market with inflation . What we are watching though is an effect of what has been accumulated for years and has no single cause.
The recession scenario seems to be the most realistic one for the years coming.
It is my view thought that what FED is trying to achieve with the rate hiking though, is not to control the inflation , but rather to make the production less "money supply prone" so that the effects -the most important being production decline and unemployment rise- of the imminent freezing of the money flowing out of it's machines will be minimised.
The rise of the NASDAQ100 is only an example of what happened due to boosting culture adopted by FED. This brings us to now.
What US is facing is the inflation rate rising, while interest rate hikes look like not being enough to pause this. The Ukraine-Russian war is something that adds on the energy crisis existing globally, even though it is not the only reason to blame for the rising on CPI .FED-among many countries- decided to counter COVID-19 loses with further easing providing money that correspond to no real product, and basically as Milton Friedman would point providing the market with inflation . What we are watching though is an effect of what has been accumulated for years and has no single cause.
The recession scenario seems to be the most realistic one for the years coming.
It is my view thought that what FED is trying to achieve with the rate hiking though, is not to control the inflation , but rather to make the production less "money supply prone" so that the effects -the most important being production decline and unemployment rise- of the imminent freezing of the money flowing out of it's machines will be minimised.
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