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How do you figure they haven't corrected? A correction is a move of 10-20%. The 10-year fell from 5% to 3.75%. It then rose over 10% from 3.75-3.78% (roughly) to 4.17-4.18 (recent peak). On top of that, the bottom was hit weeks ago and it has consolidated around 4.15%. Clearly, the trend for the time being is higher, not lower, at least short term. Long term we have no idea what will happen.
that applies to asset values and is a correction
when rates correct it means they shifted direction and go the opposite way to correct the fact where they were was wrong for the economic environment
Last edited by mathjak107; 01-29-2024 at 07:09 AM..
Initial jobless claims released this morning: 201K vs. an estimate of 216K
Continuing jobless claims are down 27K
Hindsight is 20-20, of course; it looks like the Fed ought to have raised rates one more time last year.
Absolutely, but since they didn't, there's no time like the present. It will take some cajónes to do it, but it should be done ASAP. Rather than the stock market cooling off, it appears to be getting hotter. Likewise, unemployment is near all-time lows and getting lower.
If the Fed doesn't raise rates VERY soon, then consumer inflation will get even worse before the election.
Absolutely, but since they didn't, there's no time like the present. It will take some cajónes to do it, but it should be done ASAP.
I agree - especially with the incredible performance of the stock market led by NVDIA & SMIC and reflected in QQQ and the S&P 500 -- the "wealth effect" will kick in as retail investors look at the value of their portfolios and start spending money again.
But like it or not, some of the voting members of the Fed are quite political, such as Austan Goolsbee who is President of the Chicago Federal Reserve Bank (and on the faculty of the University of Chicago Booth School of Business). Goolsbee is a very bright economist, but he is a perma-dove when it comes to monetary policy, and it is very clear he has a horse in the race when it comes to the Presidential Election and he wants the economy to support his preferred candidate.
Quote:
Goolsbee has been a research fellow at the American Bar Foundation; research associate at the National Bureau of Economic Research; and a member of the Panel of Economic Advisors to the Congressional Budget Office. He was previously named a Senior Economist to the Progressive Policy Institute (PPI) and a Distinguished Senior Fellow at the Center for American Progress.
And, of course, he was on President Obama's Council of Economic Advisors, ultimately becoming its chair.
There is no way, heading into an election, he would do anything to put a damper on the economy. Of course, he only has one vote, but he can be persuasive.
yesterday the president of the New York Fed called last week’s inflation data a mere “bump,” and predicted that interest rates would start to fall later this year (no date was provided, of course!)
minutes from the last Fed meeting indicates that its members are concerned over prematurely cutting rates.
there are plenty of signs that the economy remains strong , especially the tight labor market.
Hopefully it remains strong until November 4th. God save us.
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