Trading/Investing Thread - Page 110

On June 18 2022 18:38 Vivax wrote:
Greek yields spiking.
That worked in 2020 for crash predicting. But I don't think I'll play.

Quadrillions of not-QE in the news by 2023 imo.

On June 18 2022 21:08 iPlaY.NettleS wrote:

Panic over the ECB raising rates for the first time in 11 years from -0.50% to -0.25%?
And they haven't even raised them yet, just said they would next month.

Good lord, what a disaster the EU is.

Federal Reserve Governor Christopher Waller said he would support another 75-basis-point rate increase at the central bank’s July meeting should economic data come in as he expects.

“The Fed is ‘all in’ on re-establishing price stability,” Waller said Saturday in prepared remarks to a computational economics conference in Dallas.

Policy makers on Wednesday increased the federal funds rate by three quarters of a percentage point, to a range of 1.5% to 1.75%, the largest hike since 1994. Chair Jerome Powell, who has vowed to raise rates until there’s “clear and convincing” evidence that inflation is abating, told reporters at a post-meeting press conference that another 75 basis-point hike, or a 50 basis-point move, was likely at the Fed’s next meeting in July.

Officials forecast rates will rise to 3.4% by December and 3.8% by the end of 2023. Those would both be the highest levels since early 2008, when the US economy was on the cusp of the financial crisis.

Waller discussed lessons learned from that crisis and the pandemic in his remarks.

The Fed took swift and aggressive monetary policy action to stem economic and financial losses during the financial crisis and returned quickly to that playbook as Covid-19 spread in March 2020 -- slashing rates to nearly zero, ramping up massive bond purchases and implementing a slew of emergency facilities to stem panic in financial markets.

“The first time for these actions was scarcely a decade ago, and there is good reason to think such a response may not be extraordinary anymore,” Waller said. Future recessions, even “typical” ones, may well require turning again to the aggressive policy actions of the past two years, he said.

As a result, he said it was important to learn lessons from the experience and acknowledged criticism that the Fed had been slow to begin normalizing policy -- it only halted bond purchases in March and stared raising rates a few days later. He blamed this on policy makers saddling themselves with overly-restrictive criteria to start tapering bond purchases, which in turn delayed rate liftoff.

“By requiring substantial further progress toward maximum employment to even begin the process of tightening policy, one might argue that it locked the Committee into holding the policy rate at the zero lower bound longer than was optimal,” Waller said. “But if we again face those challenges, we now have the additional insight that only experience can bring.”

The first economist on Wall Street to predict a U.S. recession in 2023 is moving up his timeline for an economic contraction.

"More than two months ago we forecasted that the U.S. economy would tip into a recession by end-2023," Deutsche Bank Chief U.S. economist Matt Luzzetti wrote in a note to clients on Friday. "Since that time, the Fed has undertaken a more aggressive hiking path, financial conditions have tightened sharply and economic data are beginning to show clear signs of slowing. In response to these developments, we now expect an earlier and somewhat more severe recession."

Luzzetti now sees U.S. gross domestic product (GDP) growth coming in at "sub-1%" in the first half of 2023, followed by a -3.1% contraction in the third quarter of 2023 — one quarter earlier than Luzzetti previously estimated. In the fourth quarter of 2023, Luzzetti expects growth to contract by another -0.4%.

"The upshot is that the economy is likely to contract next year by about 0.5%," the note stated. "A more severe downturn leads to a higher unemployment rate, which peaks near 5.5%. The weaker labor market helps to guide inflation closer to target by 2024, though we still anticipate a nearly half percent overshoot at that point."

Luzzetti and team also see the Consumer Price Index (CPI) peaking at 9% in the third quarter of 2022. CPI, a closely watched measure of what Americans pay for goods and services, was up 8.6% year-over-year as of May — the most since 1981.

Recession fears are picking up across Wall Street and the C-Suite as the Federal Reserve embarks on an aggressive pace of rate hiking. On Wednesday, the Fed lifted rates by 75 basis points as the central bank took a harder tone on stomping out inflation.

On Friday, the Fed reiterated his hawkish stance on policy by noting in a report to Congress that the monetary body is "acutely" focused on bringing down inflation. The commentary weighed on stocks yet again despite the S&P 500 and Nasdaq Composite already being in bear market.

On June 20 2022 11:27 LegalLord wrote:
Odds are we’re already in one.

On June 23 2022 04:33 LegalLord wrote:
making money hand over fist is actually bad for opec

if we really want to sink saudi arabia, we need to trick them into becoming wealthy beyond their wildest dreams. in doing so we also stop global warming and save the world

On June 23 2022 05:10 Sermokala wrote:

Thats not how math works. Keeping people buying your product over decades is smarter than keeping prices high and watching the demand slowly sink down.

Higher volume is worth more than larger margins.

On June 23 2022 10:02 Sermokala wrote:
The prices will never go down. The rate hike is meant to lower the increase in prices.

Even then it will be years until inflation goes down to normal. Crashing the economy as fast as possible is the only way to get things under control. That's why the market halved the last couple months.