RE:RE:Sold of all of my SU this week. Experienced wrote: I have been doing some selling this week as well and have raised my cash position to 40%.
In terms of your points regarding The Fed and Powell.....yep
The thing that people need to realize is that while interest rates have gone up by Central Banknrate hikes, as long as those rates are below the inflation rate, the policy is still stimulative. Powell knows this and he also knows that he started too late and that is why he has changed his tune recently.
Sooooo....the bottom line here is that unless the inflation rate craters soon (ie the next two months), central banks will have no choice but raise rates by at lest another couple hundred basis points or more.
In the US, the impact of the rate hikes has been masked by a couple of things....
1......prior to the start of the rate hikes there were twice as many job openings as unemployed people so the impact of the rates was seen as a decline in the job openings - not actual employment. This lead many pundits to think that things were ok
2....due to COVID people had savings because they were shut in plus pent up demand to get outta jail and enjoy life. This money kept things going for a while but those savings are essentially gone. A lot of the pent up demand is now being fueled credit card debt anthis will
will end soon as well.
So when you put all this together it is just a matter of time before the sheet hits the fan and we move into a recession.