Worse, the rally was making the Fed’s job harder. The Fed aims to restrain investment and spending through higher interest rates. Rate increases slow the economy by cooling interest-rate sectors such as housing and pushing down prices for stocks and other assets. The market’s rally—the S&P 500 gained 17% between mid-June and mid-August—was doing the opposite
https://mobile.twitter.com/NickTimiraos/...3811055617
Why Are Walmart And Other Major US Retailers Canceling Billions Of Dollars In Orders As Summer Comes To An End?
https://www.zerohedge.com/personal-finan...ars-orders
[quote="Behappyalways"
First quarter results were adversely impacted by global volume softness that accelerated in the final weeks of the quarter. FedEx Express results were particularly impacted by macroeconomic weakness in Asia and service challenges in Europe, leading to a revenue shortfall in this segment of approximately $500 million relative to company forecasts. FedEx Ground revenue was approximately $300 million below company forecasts.
We're Going Into A Worldwide Recession, FedEx CEO Warns "Numbers Don't Portend Very Well"
https://www.zerohedge.com/markets/fedex-...s-guidance
[/quote]
While the japan Yen and USD broke headlines as Japan intervened to prevent a 20 year high.
There are other countries who are struggling with the strong USD such as South Korea, sterling pound and Chinese Yuan against USD
http://www.businesskorea.co.kr/news/arti...xno=100891
Singapore too is starting to sweat over a stronger USD as this is causing us to suffer from imported inflation with decades high inflation
IMO, there may be a case where the continuing action of the Fed may result in a too strong dollar and other countries will have to intervene, reminisient of the Plaza Accord. The Accord also occurred during the Fed Chairman Volker period and President Ronald Reagan massive spending. Somehow it bears resembelance to the 2 US incumbents. What happened in the aftermath of the Plaza Accord was an inflation then deflation in Japan which Japan has not recovered from till now.
Singapore suffered badly during this period and Singaporeans took a 12% indirect pay cut when the government reduced the amount of CPF companies paid in order to remain competitive and keep them here. I hope this does not repeat.
Globally, I am not sure who would suffer from an asset deflation but my bet is China if it occurs.
History seems to be rhyming ominously
(24-09-2022, 11:12 PM)CY09 Wrote: [ -> ]While the japan Yen and USD broke headlines as Japan intervened to prevent a 20 year high.
There are other countries who are struggling with the strong USD such as South Korea, sterling pound and Chinese Yuan against USD
http://www.businesskorea.co.kr/news/arti...xno=100891
Singapore too is starting to sweat over a stronger USD as this is causing us to suffer from imported inflation with decades high inflation
IMO, there may be a case where the continuing action of the Fed may result in a too strong dollar and other countries will have to intervene, reminisient of the Plaza Accord. The Accord also occurred during the Fed Chairman Volker period and President Ronald Reagan massive spending. Somehow it bears resembelance to the 2 US incumbents. What happened in the aftermath of the Plaza Accord was an inflation then deflation in Japan which Japan has not recovered from till now.
Singapore suffered badly during this period and Singaporeans took a 12% indirect pay cut when the government reduced the amount of CPF companies paid in order to remain competitive and keep them here. I hope this does not repeat.
Globally, I am not sure who would suffer from an asset deflation but my bet is China if it occurs.
History seems to be rhyming ominously
Yup china is in the process of a big property/asset bust as well reminiscent of Japan 1990. China will likely end up Japan 2.0 as I have always postulated. However they have a lot of gold which japan didnt have, and are so much bigger, together with Russia they may be able to come out of this on top.
Just a little while ago, everyone was praising Jerome Powell for doing whatever it takes, to stem the Covid-19 spiraling doom.
Actually, big events are generally rare and hence big decision makers actually only have few opportunities to practise, get feedback and adjust to get it right (let's say, compared to someone learning to execute projects or picking up a sport). All of us, in our learning as OPMIs, understand the importance of the "execute --> results --> feedback --> learn" cycle. But it is just unfortunate that the big decision makers do not have our luxury.
What is the Fed Doing?
Please allow me to translate each of these statements:
- The Fed wants the unemployment rate to rise to slow inflation.
- They want wages to fall to slow inflation.
- They are willing to throw us into a recession to slow inflation.
I think Fed officials are so embarrassed they missed inflation getting this high that they’re willing to overcorrect to the other side and force us into a recession to prove a point.
Why not allow people to see their wages rise for a little longer and have a little patience to see if the pandemic-related inflation stuff will subside on its own?
https://awealthofcommonsense.com/2022/09...fed-doing/
i wonder aloud, what does the US think they can achieve by simply putting people out of jobs!!! :O :O :O
no job, no wages, no money, no food, no energy for Xmas 2023!!
Gosh!!! how can that be a good plan at all? :O by putting it's people out of job?? :O
lousy plan to me!
Jerome Powell didnt fully think of second order effects.
A i/r that is rising faster than other countries i/r adds two risk elements: (i) an appreciating USD, (ii) interest rates becoming more expensive globally
Because of the easy flow of money, with US being the highest interest, hot money flows to them. However, it kills off US export competitveness. And US companies will start culling jobs. Secondly as interest rates boom too fast, other countries people will cut consumption in order to service interest. A good example is how Apple has priced its iphones at no price change despite prevailing inflation
Isn't that his intention? To lower inflation?
People lose jobs, willing to accept lower pay, salary comes down.
Consumers buy less things, companies forced to price products/services more cheaply.
What's not so obvious is whether he is doing it too fast.
If his government agency task is only one goal - ensuring reasonable inflation at 2%. The answer is yes that is his intent.
However, the Fed has a second policy goal it has to achieve: ensure full employment. He is running a real risk of failing to meet it and causing a castrophic global recession with massive job cuts