That would be an extra special recession trigger, but wash, rinse, repeat...how many times do we have to see the Fed do things that benefit the 1%?
I doubt rates will significantly rise as they did with Trump but if so consumers get slaughtered for buying 0% and 0 down with no jobs.
I'm in cash waiting for cheap real stuff to buy. No casinos for me.
From memory the Fed said 2 rate rises before the end of 2023 and one of those will happen in 2022. They won’t be big but with growing debt value you require lower rate adjustment because the values are so large. 0.1% rise today is probably like 0.25% in 2017.
There is always a deflationary event in order to justify an inflationary policy.
Right now, the data coming back to the US says the Economy is doing awesome, salaries are up (including stimmy), jobs shortages, property up, sharemarket up. There is no justification to keep pumping in trillions when things look great because inflation is beginning to blow up (5%+).
Hence the taper talk to warn the market to back off the leverage and make inflation go away for a while. If the market doesn’t back off, they’ll send stronger messages and then eventually have no choice but to raise rates and force the sell off.
CPI comes out on 13th July. April was 4.4% May was 5% so if June result goes higher it will mean likely action from the Fed to pullback on QE or raise rates early. In which case expect the market to freak out as they close positions.
Buy a high end car. I tried to convince my wife to get a low km used Mercedes AMG GT or Audi R8, drive daily, sell as high km car for sale price 2yrs later. It sounds crazy but because you can pickup one with sub 10,000kms you can easily sell for 50,000kms later on. Prices on these cars have gone up significantly here.