Reading Tea Leaves: What Does The Fed Do Next?

01-07-2022, 03:28 PM

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katya422

katya422

Join Date: Dec 2011

Location: United States

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Reading Tea Leaves: What Does The Fed Do Next?

Inflation is running hot:

Andthe Fed is *talking* rate increases:

But it seems thatthe big banks were already in bad shape BEFORE covid:

Four days ago, the Federal Reserve released the names of the banks that had received $4.5 trillion in cumulative loans in the last quarter of 2019 under its emergency repo loan operations for a liquidity crisis that has yet to be credibly explained. Among the largest borrowers were JPMorgan Chase, Goldman Sachs and Citigroup, three of the Wall Street banks that were at the center of the subprime and derivatives crisis in 2008 that brought down the U.S. economy. That’s blockbuster news. But as of 7 a.m. this morning, not one major business media outlet has reported the details of the Fed’s big reveal.

https://wallstreetonparade.com/2022/...er-gag-orders/

And, as many have pointed out,the mess from 07/08 wasn't ever really resolved:

https://goldbroker.com/news/two-quad...-timebomb-2261

Also:

4.5 Million Quit Their Job In November
https://apnews.com/article/coronavir...8d785a8e0a1149

Hiring has slowed:

America’s hiring slowdown continued last month, with employers struggling to fill jobs as many workers remained on the sidelines.

Employers added 199,000 jobs in December, the Labor Department said Friday, the smallest monthly gain of the year. The deceleration began in November, when 249,000 jobs were added.

https://www.cnbc.com/2022/01/07/hiri...ly-199000.html

Andconsumer debt has spiked upward by $40 billionwhen the expectation was for $20 billion:

What's your guess?

- all talk

- small increase, reverse it when markets react

- follow through on multiple small increases and gauge the reaction each time

- doesn't matter

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I've also come across the theory that high inflation increasing living costs will trigger many seniors to liquidate their assets at the same time which might lead to deflation.