Economics

Are markets really forward looking as they are purported to be? IMO we have been in a “stealth” recession with manipulated data to cover it up and appear to “smooth” the FED exacerbated cycles. Manufacturing contraction & labor market are clear signs.

I can see first rate cuts in September. Why? Several reasons. R-G model challenging to go positive for massive debt to “inflate away” so need to keep rates lower. CPI likely to demonstrate more deceleration. (Even though it isn’t reflective of what’s REALLY going on) “They get their data”

Growth Slowdown. Money Supply Contraction. Higher rates have massively tightened the lending side of money creation ~83% (FRB) reducing S&D of loans. Contraction impacting private sector (crowding out too) especially smaller businesses more sensitive to higher rates.

CPI April Report CPI +.3% M/M, 3.4% Y/Y CORE .3% M/M, 3.6% Y/Y Are 3s the new 2s? If we look at shadow (alt) inflation, we are close to double that! Do we really need this data to tell us our PURCHASING POWER has been on steady decline? (What really matters!)

GDP Q1 2024 (estimate incomplete & subj to revisions plus seasonally adj) *remember those 3 caveats! +1.6% (deceleration from 3.4% from mostly LOWER consumer spending) *Remove the fiscal spending which is bloating GDP and disguising private sector hardship, what do you have?

Cut too soon – they lower their interest expense but trigger refueling inflation in addition to massive fiscal spending. Cut too late – their interest expense is higher and they will trigger more spending to cover it. All roads lead to more inflation and monetary destruction.

***Know Your History, folks!*** Yes, massive fiscal spending that is unsustainable as it is a total burden on the people. Think “crowding out”, monetary debasement, inflation, higher taxes… FED overtightening by raising rates into a recession and then declaring early victory

True. The system is built on DEBT and money multiplying. They need to hold it together from collapse until they can’t anymore…massive deficits at 7% of GDP and debt rising to 34T+ is unsustainable or as Alan Greenspan said “US will not default, can always print!”

Higher For Longer! (been pretty consistent here!)The jobs data on paper (lagging) supports 1/2 of their dual mandate (“maximum employment”). Now they need to maintain tightened monetary policy to bring down inflation which is entrenched. (SINGULAR FOCUS as Powell as said)

Sure, per Taylor Rule, FED could cut rates with lower inflation BUT, question is, will inflation actually come down per expectations (less than 3s)? Massive gov spending plus other legislation points higher. HIGHER FOR LONGER. Prematurely cut & long end could blow out.