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In light of recent "events" and the effect they will have on the markets, another "big print" will be needed, this time possibly much bigger than the Covid big print. The problem is, we've already blown our "stimulus" load. So now what?
I do not think so. WHen they did super QE almlst 2 years ago for covid, inflation was running 2% or even lower almost all the time for the whole CPI. Everything except home prices and college education and healthcare were not going up in price for the past 7-8 years at the time. SO they thought they could do it.
Now the FED is even admitting the runaway inflation is not transitory and spreading to whole economy. They cannot afford to do another big print and have any creditability left. Its bad enough their supposed QE printing during Great recession eventually caused home prices to sour at outrageous rates starting late 2012 early 2013 with no looking back. Never mind run away inflation in other things that benefit no one unlike rising home prices which are neutral affect for single home owners as they only need one home unlike multiple groceries and gas and such. And homes historically are stable or appreciate slowly in price where as other things things like groceries and gasoline and technology parts and used cars depreciate in price until massive covid QE.
I do not think so. WHen they did super QE almlst 2 years ago for covid, inflation was running 2% or even lower almost all the time for the whole CPI. Everything except home prices and college education and healthcare were not going up in price for the past 7-8 years at the time. SO they thought they could do it.
Now the FED is even admitting the runaway inflation is not transitory and spreading to whole economy. They cannot afford to do another big print and have any creditability left. Its bad enough their supposed QE printing during Great recession eventually caused home prices to sour at outrageous rates starting late 2012 early 2013 with no looking back. Never mind run away inflation in other things that benefit no one unlike rising home prices which are neutral affect for single home owners as they only need one home unlike multiple groceries and gas and such. And homes historically are stable or appreciate slowly in price where as other things things like groceries and gasoline and technology parts and used cars depreciate in price until massive covid QE.
They'll blame the inflation on Russia. Problem "solved."
In light of recent "events" and the effect they will have on the markets, another "big print" will be needed, this time possibly much bigger than the Covid big print. The problem is, we've already blown our "stimulus" load. So now what?
The FED mandate is employment and price stability. They have no mandate on the stock market. If the stock market falls dramatically but employment stays solid or better and inflation is low, they have done their job based on mandate.
Now stock market falling drastically could cause employment to become bad, but not always. See Tech bubble bursting in 2000 when employment stayed reasonably good through 2002 despite the tech bubble burst bear market.
The FED mandate is employment and price stability. They have no mandate on the stokc market. If the stock market falls dramatically but employment stays solid or beter and inflation is low, they have done their job based on mandate.
Now stock market falling drastically could cause employment to become bad, but not always. See Tech bubble bursting in 2000 when employment stayed reasonably good through 2002 despite the tech bubble burst bear market.
Fed-gov have no business propping up the stock market, but they do anyway. They will never let the markets fail. They will legitimately nationalize the entire economy before allowing the markets to fail.
Fed-gov have no business propping up the stock market, but they do anyway. They will never let the markets fail. They will legitimately nationalize the entire economy before allowing the markets to fail.
They don't prop up the stock market directly, it may be a by-product of what they do to manage what they're mandate is, but it's not an objective. You can disagree all you want (and I know you will) but that's reality.
Fed-gov have no business propping up the stock market, but they do anyway. They will never let the markets fail. They will legitimately nationalize the entire economy before allowing the markets to fail.
Well markets can fail, but they do comeback so they did not completely fail and stay failed. And sometimes its for the better. Younglings contributing to 401K will benefit.
I mean markets failed in 2000-2002, but they did come back eventually. Its not like they failed and took 26 years to reclaim their all time high like great depression 1929 to 1955.
I agree they will not let them fail, but I do not think a 40-50% or greater drop, then a rebound a few years later to reclaim high is markets failing. I love that. Its a buying opportunity for so many when that happens who have lots of cash on sidelines.
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