related posts
125 sats \ 0 replies \ @faithandcredit 28 Jul 2022
The inflation number is YoY and its a bout a year ago the first high number was reported, the fed is probably certain that by now the inflation number will taper because we aren't going to get 9% YoY two years in a row due to how the economy adapts. So the next inflation number might be like 5%. The fed can then claim they defeated inflation with the tiny rate hike today and go back to money printing and lowering rates again i guess. But lets see
reply
125 sats \ 0 replies \ @TheBTCManual 28 Jul 2022
The fed looks like they'll keep talking tough, but I would like to see the next months inflation print, if there isn't disinflation which I doubt there will be, then that 100 BIPS could be on the cards, and push EM's down further
reply
121 sats \ 4 replies \ @DemandUtopia 27 Jul 2022
The Fed is staying the course and no signs of turning the money printer back on. Bad for stocks/housing/crypto. $17.5k may not have been the bottom of this bear market yet. Financial markets might really need to break before the Fed pivots.
Good for Republicans. Assets will be dropping more into November elections. Unemployment will be rising. Consumer inflation will still be 8%+. Only two more Fed meetings before the election (September and October).
Let's Go Brandon!
reply
25 sats \ 3 replies \ @faithandcredit 28 Jul 2022
I am hearing from several places that this rate hiking is suppoed to be bullish but i dont fully understand why. The pump today seems to confirm the narrative tho but lets see.
reply
127 sats \ 1 reply \ @shyfire 28 Jul 2022
I suppose it's because 0.75 is the soft landing number, but I have a hard time believing it will do enough to curb inflation given what's going on in the world, so we'll see.
reply
25 sats \ 0 replies \ @faithandcredit 28 Jul 2022
The west has a century of experience as a market economy. Right now as a result of the inflation shock people are changing habits, saving, spending less, companies are optimizing harder, spending less, the next inflation number could be a surprise to the downside, but lets see.
reply
25 sats \ 0 replies \ @RustinBbu 28 Jul 2022
I think it's bullish because if they are hiking 0.75 it means they think they have this much room to continue to hike, meaning they are confident that the economy can absorb these interest rate levels and not tank.
Either that, or people think 0.75 is the last of the hiking and they are going to have to start cutting rates and doing QE soon enough, so people are front running the next Fed move.
reply
120 sats \ 2 replies \ @puhbuhruh_old 27 Jul 2022
The big question is what part of the financial system breaks first under the increased stretch. In 2019, it was the repo market. What do people think?
reply
150 sats \ 1 reply \ @jp 28 Jul 2022
The most severe breakage will occur in developing nations where inflation will be outsourced (e.g Sri Lanka).
Countries that hold the majority sovereign debt of these failing developing nations will get hit hard (in Sri Lanka's case, China will get hurt - as well as Japan). From here, decreasing amounts of contagion will spread and find it's way back to the US. The US will be the best-worst option for investment so demand for the dollar will remain strong.
The US will come under political fire from geopolitical allies requesting the US to let up quantitative tightening; the US will oblige and will start laying down the framework for th next recession through more doveish monetary and fiscal policies.
My $0.02
To answer your question more directly: I think that there will be a failure in Alternative Lending markets within the US (which have grown to represent ~35% of all unsecured lending). A bunch of PE firms heavily invested in the space will get crushed
reply
25 sats \ 0 replies \ @puhbuhruh_old 30 Jul 2022
Great answer, thank you!
reply
40 sats \ 0 replies \ @sb 27 Jul 2022
"If a central bank can "drive an economy off a cliff" you don't live in a free market. I don't make the rules." - Marty Bent
https://twitter.com/MartyBent/status/1539610635234906112?t=Q-KcBgkw7rVmnpBXToGF7A&s=19
reply