Submitted by LessTalkMoreRock1 t3_yhqbqx in wallstreetbets
-inflation is the same
-unemployment is the same (low)
-stock market is higher
-home prices just barely off of all-time highs
-consumers still buying the latest iPhone
Jpow isn’t going to be kind with all this going on. He’s trying to tell us to stop spending yet we do the opposite. bigger hikes are coming and the terminal rate will be higher than 5%
Actually SPY is almost exactly were it was the last two times they raised rates. It if stays around this level that will be three .75 increases and the market is at the same place. That can’t be a good sign.
Do they implement rate hikes the day they say they will or are they usually scheduled rate hikes?
They change the day they announce or thereabouts.
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30 companies is not the stock market
The rate hikes only started 4 weeks ago?
They started in March, regard
🤣🤣 bunch of regards out here
Bro what???
There should be an /s. May comment made much more sense before the one above was deleted.
People get used to buying stuff.
Everyone is bitching about inflation, but everywhere I go places are packed.
As if the average consumer never took Econ 101, and doesn’t know they’re supposed to buy less when prices go up. Preposterous!
I'm certainly buying a lot less. The crashed stocks are much more appealing.
Yeah. I'm in the batten down the hatches stage. I started a new job before inflation took off, and I'm not sure how secure it is. On top of that, I'm not sure how quickly I could find a new job if I lose the one I have.
So for me, I've paused all big expenses.
I've been in that stage for 10 months now. Sitting on about 100k cash by now.
This is exactly what JPow is trying to prevent. He doesn't want inflation to become entrenched and at the moment it looks like it is getting that way. JPow needs to shock the system. Can't see how there is any talk of pivot.
When interest rates get high enough people will have to use their money to pay interest/pay off debt to avoid paying more interest instead of buying things. That's when it will slowly get fixed. We need rates that are higher than inflation.
It more of a time affect, people are just eating away their saving to continue buying the same stuff they did last year when prices were 10% less even though they are not earning 10% more. Combine this with the increased interest payments and people will run out of money quick. I would say spending will be good till holiday season but then its a rough winter.
This satisfies my confirmation bias and makes me feel better about my short positions!
There's nothing like a daily bias confirmation to keep one's mood high
It helps my smooth brain feel smart ok! I'll take what I can get
Waiting for this week the enter short positions. I feel like this bull trap has a little juice left before it snaps
Kinda bizarre but a long time ago Americans could actually vote on how much currency was in circulation, and what it was made of. Now we just wait for these geniuses to send the tablets down from the mountaintop.
We consume iodine tablets for Putin
Might be wrong but Jpow was not an economistC but instead an attorney and investment banker back then. Man we fuxxed
Terminal is priced in at 4% rn but it'll be 6%+ imo. I dont see rates slowing for a bit.
Its all a matter of opinion, but core inflation is terrible and must be stopped in order to save retirement for millions of people.
The red rate must be higher than inflation, it’s just that simple. So, I agree, at least six but I think less than 8.
So rate hike to stop a recession. Rate hikes are what is causing the market to lower in the first place. The only reason its happening is to stop inflation from getting out of control in the hopes of orchestrating a stock crash to crash commodities, but commodities are increasingly getting harder to manipulate as other factors are impacting their prices more. Not to mention the suadis and opec are tired of the feds manipulation and are willing to cut oil production faster than the feds are willing to increase rates.
Rate hikes will of course cause a descent stock market correction, but allow for future growth when things settle, but the problem is that the market will want 0% again and won't tolerate "higher " rates like 2% and have a decent booming stock market.
Well, let's be real the market will tolerate whatever it's given. But, yes close to 0% rates are optimal for fastest growth of economy. It should be remembered though that with 0% interest rates comes gross company valuations and wealth gaps. Along with it comes a more volatile market environment in general due to unnecessary risks of businesses.
Personally, I think that rates should be atleast the inflation rate. This means that 2% would be the bottom of rates. The 0% rates screwed us if you look at the economic reaction from a small virus.
Y'all are just pissed because he turned the money printer off
Whose y’all , I’m extremely excited by this. My dick is hard
Proof or ban
You heard the man, PROOF OR BAN
Lemme see
😂
My tits are jacked.
That’s what I’m talking about
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Papa Pow just cooking up the biggest green bullcock of all time.
Fact is, with USD gaining so much strength, international purchasing power has remained or even gone up. Truth is, if you bought SPY 1yr ago and sold today it would buy just as many Euros today as back then.
We gonna have one more gaspy P&D before S&P becomes another FTSE or NIKKEI where only lucky volatility traders make out.
I'm calling it, 1.0% Rate hike vs 0.75%.
Same. Jpow needs to be taken seriously and this is how he’s gonna do it
I believe he will be Hawkish AF but we still get .75bps hike. The real question will be if the market believes him or if like in June when he comes out saying hawkish shit the market yawns and buys the dip harder. Jpow speech days were some of the biggest greenest dildos all year up until Jackson Hole.
Bro it’s 75 basis points or .75%, .75 basis points is .0075%. Morons
Agreed. I wouldn’t trust me with numbers. Well with anything really.
.75% in November and December
I thought it would be 1.0% last hike.
>Jpow isn't going to be kind with all this going on. He's trying to tell us to stop spending yet we do the opposite. bigger hikes are coming and the terminal rate will be higher than 5%.
Do the stocks go down immediately after the fed hikes the interest rates or does it take time?
It'll depend on his speech afterwards. It went up in July because people took his comments as telegraphing a pivot. If its a hawkish speech like Jackson Hole it'll drop like a rock.
They start crashing before he can finish his sentence.
Its true...The greater fools are still flush with cash and buying everything under the sun
​
The peddle will stay to the metal until the greater fools are eating ramon noodles again and staying miles away from the nearest (R) or car dealership.
Hikes of the Federal Funds Rate can have a delayed impact for certain factors (i.e.-inflation) of around 12 to 18 months but we can see that mortgage interest rates have begun to rise rapidly recently, as well as the strength of the dollar.
As far as the terminal rate, it's my understanding that what got the United States out of the inflation in the late 1970s - early 1980s was raising the Funds Rate above the curve of inflation. If core annual inflation is 6.6% as of September 2022 and this number is well below the actual inflation we're experiencing, a terminal rate of 5% would still be well behind the curve of inflation and it's very possible we would still be in stagflation or inflation would appear like it had gone away, only to return stronger.
A big question is if the FED will stop raising rates or even cut rates before inflation is ameliorated sometime in Q1 or Q2 of 2023 and what that would mean for the future of the US economy.
Good word useage, ameliorated!!
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I wish people would stop saying that rates needed to go above inflation. You have to account for the debt to gdp ratio. If you have twice as much debt as a percent each rate hike is twice as effective.
In reality yes. But all these posts have me nervous that we get a sudo reality instead... Due to midterms especially.
I'm nervous too but I think the recent rally has boxed him in. If he comes out with a dovish speech the market is going to blow its roof off and that isn't what he wants. I think that WSJ article last Friday was a test to see what would happen if they telegraphed any type of step back and the market failed.
Which article are you talking about here?
The article by Nick Timiraos from 10/21 saying they were debating the size of future hikes.
That’s a really interesting thought. It hadn’t occurred to me that the fed would bluff as a test. Underrated comment for sure
Just bought a new blender LOL
Have you been listening earnings calls? People are definitely not buying the same amount
I’m betting the terminal rate comes in around 9-10%. The fed still has lots of work to do.
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Hi, welcome to Wendy's how may I take your order???
People who expect 50points despite reports are showing strong employment and spending are true regards.
Just wait for midterms to be over, that's when we're gonna get a surprise 100 bps
Using interest rate to fight climate change, health crisis and war is highly regarded.
Yeah but they ain’t fighting those things, they’re fighting inflation.
Fed has said multiple times now that their tools aren’t sufficient to fight inflation and that the actual government needs to pass laws to tackle the underlying causes.
and thus the FETT needs to force the actual senile government to do something by going all bonkers with rate hikes. May i suggest 300 basis points? followed by 100 points each month.
ok... so when more hurricanes destroy more homes in florida, jacking up insurance rates even more, how would interest rates solve that?
or Mississippi river no longer a shipping lane, causing the price of soy to double and cost of cattle feed to double, how?
How do rate increase fight the cause of inflation?
People buy less so grocery stores cut price in half after expiry date: easy 0% inflation
Inflation will also force people to spend less.
So why cause recession with rate hikes if they want people to spend less?
It's the only thing the fed can do. Rate hike is good for the rich. The job economy is too stron. We want cheaper labor and cheaper stuff and it's the big advantage for the rich. Cheaper stuff doesn't matter for any of us if we're going to end up at the soup kitchen and wendy's dumpster.
We need daddy to be meaner or we won't get the message
They'll wait until after midterms to hike rates again
So you saying no hike on Thursday?
>So you saying no hike on Thursday?
That is correct, I can promise you there will be no rate hike on Thursday.
Geeze, we would all be fucked then.
Because the rate hike is on Wednesday you dolt.
Not all of us are American lol
There are different people casting all different kinds of blame from person to person. But the fault lies in all of you! YOU, who bought that three hundred thousand dollar house when you only had twenty thousand to put down? YOU, who bought that third car, even though only two people in your home drive! It is time to stop pointing fingers! Finger pointing gets us nowhere, Steve! We have mocked our Economy. And now the Economy has cast its vengeance upon us all!
all hail the glorious debt monster may its tentacles smother us all
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Remember, this is the guy who said normies are making too much. Hes looking out for bussiness intrests, not you or me
The real problem is that it takes at least 6-12 months before the interest rate hikes even start to cause economic effects. He’s in fact overloading the us economy.
The chain of stores I work at is up 1 million in sales this month compared to last October. People are still spending their money willingly and spending more. Unemployment is actually up a bit too
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Inflation hasn't changed. He won't be happy
We can voluntary buy less or JPow will make us buy less, I am buying less of unnecessary stuff and more cheap stocks.
CPI on a monthly basis is definitely lower than it was. I’ll never understand why people can’t seem to grasp what the annualized CPI actually represents.
We haven’t seen 8% inflation every month.
Inflation peaked in June, rest of opinion regarded as trash.
Fuck Yo Puts
Check the cboe put/call ratio index. The puts have been fucked. Now comes the drop.
It's time to load up the wagon with puts. If the feds hawkish buy and dovish wait till cpi.
rylar t1_iuf75bq wrote
stock market is definitely not higher than it was before the rate hikes started