RE:Javaman Yeah Rockit2:
That is what some analysts covering the market are currently thinking. Some expect interest rates to continue rising into early next year. Others think that the Fed will slow the rate climb sooner, noting the possibility of overshooting the mark.
As I have stated before, I believe that much of the inflationary picture has been caused by poor logistics. A lack of supply, pandemic related, directly effected the inflationary picture. This issue is still problematic as it has not yet been fully resolved.
Everyone would prefer a softer economic landing. No one wants a deep recession, so entrenched as many feel that the current inflation rate may now appear to be. The Fed wants to be appear to be hawkish but they also may also want to appear more sensitive to market gyrations than many might choose to believe.
They don't want again to appear to be too foolish, as they may have appeared, in the very recent past. They chose to extend their easy credit policy, well past the time that it may have been necessary to accomplish their pandemic related task.
Many believe that the Fed could have raised rates much earlier and that could have quashed some of the inflationary pressure and much sooner.
They caused an overextended market rally that was based upon a weak methodology that extremely low interest rates might continue unabated.Then inflation struck hard which they initially promoted as a transitory phenomenon.
Now they have changed their mindset with an early and aggressive monetary policy which is now driving the market sharply lower in fear of what they might do next.
The Fed needs to regain some considerable credibility so they had better not mispeak again or make any further financial mistakes!
Perception is one thing. That can perform miracles in the mindset of the herd.
But when reality sets in, a proper balance of fiscal and monetary policy is the best choice to make. Move swiftly when deemed necessary but exercise some caution when the need might arise.
Stopping a race car, much too quickly, may cause only squealing tires or a perhaps a very severe and sudden stop. A lot depends upon the skill of the driver and the condition of the track.
But when the driver behind the wheel is driving at night with a less certain visibility, then it might be more prudent to flag him down and let him run another lap.
I am in the latter camp when it comes to present day fiscal decision making. I believe that common sense will prevail once again!
Time will tell!
Credibilty is important. Without it, what have we got?
All the best! Java