, makes $US110 million in the process. He celebrates by going out to dinner with his parents.
After lifting rates by 0.75 per cent in late July and making it clear he wasn’t scared by signs the economy was slowing, Powell let slip that it might “likely become appropriate to slow the pace of increases” later in the year.where that decision was made similarly offered something for everyone. Are investors wrong to be betting that the Fed is exaggerating its war on inflation and the peak in US inflation and interest rates might not be too far away?Certainly, there are signs that goods inflation is easing as commodity prices come down. Supply chain disruptions are easing. And higher rates do seem to be starting to do their job, with consumer spending rolling over in lower socioeconomic groups.
“The same crowd that thought that inflation was transitory, is now celebrating peak inflation and the coming of an early Fed pivot. However, what they don’t seem to get is that bringing inflation back to 2 per cent is going to require patience, from the Fed and markets.”Perhaps the attitude of investors is not surprising. As Bank of America’s chief strategist Michael Hartnett points out, for every $100 that investors pumped into US stocks since January 2021, there have been outflows of just $2.
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