TSX:AX.PR.E - Post by User
Comment by
Torontojayon Nov 12, 2024 6:00am
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Post# 36307740
RE:RE:INFLATION
RE:RE:INFLATION Don't forget that when J Powell lowers Fed funds there is also a risk of inducing inflation if they're no longer in restrictive territory. I've talked often in the past about r- star and the neutral rate of interest which is a theoretical level of interest rate that is neither stimulative or accommodative. What is r- star today? It is possible that the Fed is not in restrictive territory at the moment and with core
cpi at =~ 3.3%, the genie inflation is back in the bottle. The current pricing on the 10 year is telling us the neutral rate or r- star is a lot higher than the Fed believes it is.