Everyone talking about this....and as far as cuts/hikes it doesn't seem like a pipe dream anymore.
So im no economist but I gather a soft landing pretty much means we are avoiding a recession/mass unemployment/defaults. So if that happens....doesnt that also mean that we are gonna keep paying what we are currently paying for things? Shit never goes on sale any more either, so are we basically gonna keep paying top dollar for every single thing we buy from now on?
Kendadon1 : A soft landing mean they are going to slowly increase the rate hikes making people unemployed not like everyone getting cut at the same time because they increased it to high and fast
razo2 : you need to remember the longer the rate hike the more severe the debt problem gets. you can only achieve soft landing when the government have money to absorb the shock. not with US government case. they borrow more money from bonds the more their citizens have to pay those debts. inflation is created due to high demand and lack of supply.
JP blames due to shortage of supply is bull shit. most companies can pick up production within weeks, is all about money and man power. the real inflation is caused by drunken sailor at the money printer. look into 1970 we are facing the exact same problems, but 2023/24 is alot worse.
back in 1970 the federal government also raised rates, but when inflation goes below 2% he cut rates because of a recession, it was a very big mistake, inflation fly back to 14%. that is where Paul Volcker come in with a 20% rate hike and hold for a period. the key point from Paul Volcker is inflation is only killed with longer time and higher rate hike. you need to see demand destruction to happen and let the dust settle only you can do a rate cut. aka everyone needs to feel the pain in the business and commodities end and cut prices, then you will see inflation goes down. how we achieve that is simple, higher unemployment.
oil market is telling you a recession is coming. we trade our supplies with care because we don't want to repeat the same mistake back in 2015/2016. and oil market always look at the bond market. ask any high profile traders with billions if they have any exposure to bonds. they will tell you yes. but ask any retail investors they will say the bond market is for idiots.