Rampant Inflation Impacting Producer Price Index
Wall Street over the past few weeks appeared to be preparing for a more hawkish Federal Reserve approach to tamp down on sharply rising prices.
The FOMC did raise rates by 25 bps, and the markets promptly responded by going higher. The markets' responses indicate the Fed completely lacks credibility in doing anything to get prices under control... instead the Central Banks have committed to stability and adopting a status quo approach in the near term.
Rationale appears to be mid-term elections and a desire to not "upset" the markets given tremendous uncertainty.
Instead of taking responsible action, it appears that inflation will continue drive higher, and a simple trend reflects PPI raising at least 4% as midterm elections draw closer.
Short-term, markets will continue to behave bullish, inflation will continue to rise, and the depth of a total market correction will be deeper the longer this continues.
Unfortunately, it's apparent that a regime change will be necessary at the Fed... likely resulting from rampant inflation and a landslide Republican win at the polls. High probability the GOP will have control of both chambers of Congress going into 2023.
The FOMC did raise rates by 25 bps, and the markets promptly responded by going higher. The markets' responses indicate the Fed completely lacks credibility in doing anything to get prices under control... instead the Central Banks have committed to stability and adopting a status quo approach in the near term.
Rationale appears to be mid-term elections and a desire to not "upset" the markets given tremendous uncertainty.
Instead of taking responsible action, it appears that inflation will continue drive higher, and a simple trend reflects PPI raising at least 4% as midterm elections draw closer.
Short-term, markets will continue to behave bullish, inflation will continue to rise, and the depth of a total market correction will be deeper the longer this continues.
Unfortunately, it's apparent that a regime change will be necessary at the Fed... likely resulting from rampant inflation and a landslide Republican win at the polls. High probability the GOP will have control of both chambers of Congress going into 2023.
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