FED aggressive rate raise Q1 next year?

Somehow I have this gut feeling they will be making sharp rate hikes which will take the market by surprise.

 

Define "sharp"?
E.g., 0.5% in one go?
Or more than 1% in one hike?

The "expectation" (purportedly) is three hikes in 2022, right? Yet, no actual taper in sight so far...

 

Theres no room for hikes unless they want to crash it.

They may say they are easing in other areas like they already have done (supposedly) but its a big nothing burger. They cant do much and they know it.

 

We talking usa?

 

You’d need your head in the sand if you’re taken by surprise by interest rate hikes.

 

Let’s revisit this in 3 months. End of the first quarter.

 

Yes, they may intentionally crash it. Look, the mid-terms in Nov. From what I've seen, if you thought inflation is bad now, it will be a lot worst next year. Omycron can only delay it for 1 month at the most. WFH and plandemic is coming to an end. Unless there's a new lab virus, which I don't think anyone has the appetite for now, especially the elites that yearn to travel freely. Money is useless when you can't go on cruises and vacations. After a while, even $100k bags and million dollar watches become boring if you can only stare at it at home.

With wage driven inflation happening, a crash now is less risky than no crash or a crash in Oct.

 

Yes, I'm talking about usa and fed.

 

Powell seems trapped.

he likely got re-elected by Biden with the agreement to act on inflation but with yield curve inversion pointing to another recession it could be a disaster to the economy and markets. Not to mention the pressure on government debt repayments.

I could see influence from above to raise rates, followed by another Powell Pivot when the president doesn’t want a market crash on his watch.

Interested on how you see it?

 

Trump's mistake was to pump the stock market to the extent that he was vulnerable to a market crash. The pandemic has shown that it's not possible to avoid a market crash because you can't control what happens around the world. Someone can leak a new virus, sabotage a nuclear power station or the electrical grid crash that shuts down the stock market. What Biden can do, however, is to time a market crash. Biden still has another 2 years to go and with raging inflation, a market crash now is what he needs.

 

0.25 end of next quarter.

 

If that’s the case then no doubt they’re busy strategising on what powers to grab when they ‘come to the rescue’. If they can’t prevent a crash then a timed crash-and-grab could still work out pretty well for them. I’ll bet it has something to do with rescue packs to the ‘poor and middle class’. Casting a wider net to drag more of the middle classes into the increasingly socialist class (former poor, now utterly state-dependant).

 

It doesn't matter anymore whether they raise or don't raise. Their hands are completely tied.

 

So the first thing is to assume interest rate hike will crash the market? I imagine a slow unwind rather than a flash crash.
And second is that Biden and Powell want that?

If so then the question is how do they sell it?

 

China is just entering into a property bust driven economic downturn, if the Fed raises rates, what will happen?

 

Debt owed in USD can be considered forgotten about.
Prob spark a Lehman brothers type contagion which would bring many other institutions to their knees.

I think if this becomes reality it’s very possible Xi Jinping Steps in last min to backstop any leaks. Politically he looks good to be doing something about housing prices but then saves the country from economic disaster.

thoughts?

 

3% each quarter moves x 3 = 9% to overcome the 8% inflations
that would be considered agressive