Federal Reserve - 0.25% rate rise today 03-22-22 from the Fed

[Thin Lizzy]

I recall George Bush #1 going into a supermarket and not knowing how to checkout.

These people have in some cases been coddled for their entire lives.

coddle
kŏd′l
transitive verb

    To treat indulgently; baby. synonym: pamper.

If I remember correctly, when he went to the cashier, and she started scanning items, he was shocked because he had  never seen that before.

[Mayday]

Inversion curve:

2 year 4.94 - 10 year 3.86 = 1.08

https://www.multpl.com/2-year-treasury-rate

Nice new trendline, this time double the distance than historic.

More Americans flying in planes in June 2023 than pre pandemic. Meanwhile 98% are calling the US is in recession right now.

US Fed rate should end up somewhere near 7% in 2025.

Giddyup

[Flexacon]

US Fed rate should end up somewhere near 7% in 2025.

I don't know about 7% in 2025, but higher definitely into 2024.

It’s an inconvenient truth because nobody wants to believe right now that rates can go higher which would also correlate with higher DXY, higher oil and new ATH S&P.

This is happening. Just waiting for a good reason to turn bullish on higher oil, but the fact that Buffet is long oil and buying every dip is almost good enough.

I've got end of Q1 or Q2 2024 for when the music stops. For short term probably reached the peak in SPX (possibly hit it before FED minutes and then dump) and BTC. Slow grind down for the next few weeks if minutes are bearish.

[TheGrinch]

wooooooooshhhhhhhhhhhhh


https://www.cnn.com/markets/fear-and-greed

[Flexacon]

I've got end of Q1 or Q2 2024 for when the music stops. For short term probably reached the peak in SPX (possibly hit it before FED minutes and then dump) and BTC. Slow grind down for the next few weeks if minutes are bearish.

They decided to dump it instead of a grind down which is even better. Sold at the top, shorted the top and now short profits taken. SPX should bounce soon, either later today or or tomorrow. SPX 4380s is a good zone to long (I'm building a position over the next couple of hours in case it pumps into close, the rest will be overnight and tomorrow) and then I will allow up to a week for it to reach it's upside potential.

I shall return soon to continue my master class in SPX trading

[Mayday]

They decided to dump it instead of a grind down which is even better. Sold at the top, shorted the top and now short profits taken. SPX should bounce soon, either later today or or tomorrow. SPX 4380s is a good zone to long (I'm building a position over the next couple of hours in case it pumps into close, the rest will be overnight and tomorrow) and then I will allow up to a week for it to reach it's upside potential.

I shall return soon to continue my master class in SPX trading

Nicely done. You are always good with the timing.

The data noise on social media right now is insane. Bearish gurus still claiming to be correct with cherry picked data despite -10% from ATH. Entire feed is euphoric bearish with cherry picked data.

I appear to have been the only bastard who can actually understand GDP and employment data correctly. I said ages ago once unemployment cracks we have approx 1 year for it to play out. It still hasn't cracked, US went down to 3.6%. US GDP Q1 positive, Q2 positive.

We have also come from such dizzying heights in 2021-22, the YoY is NOT an indicator for a crashing economy in 2023. If we went +200% in orders and ran out of shit, then come down -50%, we are back to a normal operating economy. We would need to be -75% to have a crashing economy as that would be -50% from the usual run rate.

To match the calls for the ‘biggest crash on record’ claims out there we would need to see -90% YoY in the data. We simply do not see anything close to this and we have full employment.

Anyhoo the below is what my brain tells me if i take the low as 3,491. Level 1-2-3 would be short timeframe - 6mths or so and if nothing happens we run towards level 4-5 out to late 2026 or something like that (i haven't got my model in front of me).

S&P low 3,491
Level 1 - 4,538
Level 2 - 4,887
Level 3 - 4,957
Level 4 - 7,680
Level 5 - 7,924

There is another outlook i did which ponders if the October 2022 sell off was a mistake and instead i take the low from the pandemic. In a nutshell i have 2 outlooks showing a double top which is why i have an S&P long for 4,800 S&P with no fucks given. once there, see what the landscape looks like.

[Flexacon]

we are back to a normal operating economy.

This is the key right now. Getbiggers might not like Biden, but under his watch and mostly thanks to his handlers, they have done a great job managing the markets and economy post covid money printing. Such a great job in fact that covid type stymies may well eventually become the new norm.

Anyhoo the below is what my brain tells me if i take the low as 3,491. Level 1-2-3 would be short timeframe - 6mths or so and if nothing happens we run towards level 4-5 out to late 2026 or something like that (i haven't got my model in front of me).

S&P low 3,491
Level 1 - 4,538
Level 2 - 4,887
Level 3 - 4,957
Level 4 - 7,680
Level 5 - 7,924

There is another outlook i did which ponders if the October 2022 sell off was a mistake and instead i take the low from the pandemic. In a nutshell i have 2 outlooks showing a double top which is why i have an S&P long for 4,800 S&P with no fucks given. once there, see what the landscape looks like.

I'm not sure timing wise though as I thought SPX could be hitting 4500 tomorrow (12th) which now looks unlikely. After this I was expecting a significant pull back, possibly as low as 4200 and then make a run at 4800 in September.

I'm now leaning more towards 4800 in Xmas and 5000 in early 2024 and then a sizeable crash.

Circling back to one of your other points regarding house prices. I've seen a lot of the big money long term investors lining up to long REITs over the next 6 to 12 months.

The 30 to 40 yearold demographic in the US is due to peak in the in the next 5 years and that potentially lines up with all the other polices over the same time frame and that could create a serious property boom. The rest of the West typically follows. If people thought house prices were crazy high now, well they will be in for a serious shock over the next 5 to 8 years. Looking to cash buy something myself as an investment.

[Mayday]

Property was an easy call. I nailed it. Even looking back I couldn’t have done anything better or gone harder.

It’s not about demographics.

Why 99% are wrong about property is they apply their experience of higher rates in a low inflation environment. We are not in a low inflation environment therefore their thinking is wrong.

In an inflationary environment higher rates begets higher wages begets higher inflation.

I could write several pages of vomit about it. Basically only spastics think property will crash. In saying that, moving regionally was a core strategy. Where I am has grown +8% YoY meanwhile city is -15%.


On the DXY front I might be wrong out to end 2023 I took a small position in a silver miner. I’m at odds with this one but I’m happy to take a punt.

[Flexacon]

They decided to dump it instead of a grind down which is even better. Sold at the top, shorted the top and now short profits taken. SPX should bounce soon, either later today or or tomorrow. SPX 4380s is a good zone to long (I'm building a position over the next couple of hours in case it pumps into close, the rest will be overnight and tomorrow) and then I will allow up to a week for it to reach it's upside potential.

I shall return soon to continue my master class in SPX trading

Closed at 4400 and profits taken. Wait now for CPI

Property was an easy call. I nailed it. Even looking back I couldn’t have done anything better or gone harder.

It’s not about demographics.

Why 99% are wrong about property is they apply their experience of higher rates in a low inflation environment. We are not in a low inflation environment therefore their thinking is wrong.

In an inflationary environment higher rates begets higher wages begets higher inflation.

I could write several pages of vomit about it. Basically only spastics think property will crash. In saying that, moving regionally was a core strategy. Where I am has grown +8% YoY meanwhile city is -15%.


On the DXY front I might be wrong out to end 2023 I took a small position in a silver miner. I’m at odds with this one but I’m happy to take a punt.

The 30-40 demographics peak which btw is the same for US, UK and Oz is more me pointing out that there is plenty of fuel  for the fire and that should help RIETs which have been hammered shine when that demographic peaks. It's just not my type of investment though.

I typically just think of as property as one of the original Ponzis. It only goes up and it's all typically government driven. No need to over think this one, especially if you can get easy passive income from it. Don't think I could unravel what makes it tick even if I tried, as you said 99% will end up getting something wrong.

[Mayday]

This is a counter argument I love to use when people tell me the economy is shot.

Toyota lead times at 9mths vs 50 days.

According to media guru logic people sell their houses and become homeless but they’ll be damned if they are cancelling their Toyota !  So regarded.

This is why the Fed is going 2 more times. They’re gunning for the Toyota metric lol 

[Flexacon]

This is a counter argument I love to use when people tell me the economy is shot.

Toyota lead times at 9mths vs 50 days.

According to media guru logic people sell their houses and become homeless but they’ll be damned if they are cancelling their Toyota !  So regarded.

This is why the Fed is going 2 more times. They’re gunning for the Toyota metric lol 

The UK fucked up its economy worse than most, but neither the Economy nor property is crashing. Those that can't afford their mortgages because of rate rises can temporarily switch to interest only payments (modern day slavery in action here) so no one is busting out.

2 more hikes, new ATHs and then recession. Too many people went all in on the bust too early and are now gonna miss the ATH and then miss the draw down.

I will add though that this next month or so might be bearish so the euphoria of those all in on the short is gonna be wild. Don't see that ending well for them though. I've gone short SPX at 4485. Will add more short positioning if it goes in the 4500-4520 area or wait for confirmation of a pull back and add more shorts lower.

[Mayday]

The UK fucked up its economy worse than most, but neither the Economy nor property is crashing. Those that can't afford their mortgages because of rate rises can temporarily switch to interest only payments (modern day slavery in action here) so no one is busting out.

2 more hikes, new ATHs and then recession. Too many people went all in on the bust too early and are now gonna miss the ATH and then miss the draw down.

I will add though that this next month or so might be bearish so the euphoria of those all in on the short is gonna be wild. Don't see that ending well for them though. I've gone short SPX at 4485. Will add more short positioning if it goes in the 4500-4520 area or wait for confirmation of a pull back and add more shorts lower.

Heard something today which confirms my adjusted model. Basically coming from the horses mouth through an associate so I’m 95% confident now.

5.75% in 2023.

We will go to 9% in 2026.

Oz is lagging because we are going to hike all the way which is what I figured.

This gives us 3yrs of wage inflation and payments reductions to prepare. It also means a commodity run is coming so anything which ran up and sold off is basically relevant regardless of what price. The silver position I took the other day jumped +17% so yeah, it looks like things could get pretty bananas.

[Flexacon]

Heard something today which confirms my adjusted model. Basically coming from the horses mouth through an associate so I’m 95% confident now.

5.75% in 2023.

We will go to 9% in 2026.

Oz is lagging because we are going to hike all the way which is what I figured.

This gives us 3yrs of wage inflation and payments reductions to prepare. It also means a commodity run is coming so anything which ran up and sold off is basically relevant regardless of what price. The silver position I took the other day jumped +17% so yeah, it looks like things could get pretty bananas.

I definitely wouldn't bet against another rate hiking cycle taking it 9% and I've been a firm believer that a commodities supercycle will happen in the not to distant future, but we'd need a proper recession first before that kicks off.

Today right now I've got US10yr and DXY bouncing from here in a significant way and an SPX draw down. I'll even try call a time 2PM GMT 

[FitnessFrenzy]

The rate hikes are good. We need to get inflation under control. Of course it hurts some sectors and some investments, but not getting inflation under control would be worse, for the overall economy.

[Mayday]

anyhoo 0.25% will happen next week and this will fit my adjusted model. Next rise I have is 0.25% in the 31/1 FOMC so let’s see.

It also sounds like we will get an actual signal for the S&P to dump. US govt will ban senators from trading shares (publicly).

[SOMEPARTS]

US govt will ban senators from trading shares (publicly).

If this actually happens you can be sure all the gains in this cycle are over.

They are "forced to sell" locking in gains on probably a sweet one time tax holiday and magically the market tanks right after.

[Mayday]

If this actually happens you can be sure all the gains in this cycle are over.

They are "forced to sell" locking in gains on probably a sweet one time tax holiday and magically the market tanks right after.

Fed ban was peak 2021 equities 😉

Therefore if we don’t get confirmation of this happening now, it means we look out towards 2025-26 which would also agree with the trends I have posted about 25-26.

It’d be ATH in 25-26 and then goes into the long term range Flex and Lizzy have talked about.

[Marty Champions]

Heard something today which confirms my adjusted model. Basically coming from the horses mouth through an associate so I’m 95% confident now.

5.75% in 2023.

We will go to 9% in 2026.

Oz is lagging because we are going to hike all the way which is what I figured.

This gives us 3yrs of wage inflation and payments reductions to prepare. It also means a commodity run is coming so anything which ran up and sold off is basically relevant regardless of what price. The silver position I took the other day jumped +17% so yeah, it looks like things could get pretty bananas.

Wage inflation is almost nothing the next 5 years because too many immigrant applicants for work easily replaced

[Mayday]

Wage inflation is almost nothing the next 5 years because too many immigrant applicants for work easily replaced

Not correct.

Higher rates fuel higher wage inflation.

The lowering of rates this past 40yrs coincided with the lowest wage inflation on record. From 2020 we entered an inflationary cycle period which is likely going to play out over 20yrs. We will experience the largest wage inflation ever because rates will be higher and stay higher during this period.

The importing of people is due to low birth rates and has everything to do with keeping a country from collapsing.

Go back to my early posts and i stated the outlook i was working from in a nutshell was:
cars 3x
property 2.5x
wages 0.5x

[sculpture]

But will the wage inflation be positive in real terms?

[Mayday]

But will the wage inflation be positive in real terms?

If measuring in terms of consumption of CO2, no. This meaning you can buy less ‘stuff’ after than you could before. You are poorer.

However…… one could argue it’s wasteful consumption you lose therefore are you really poorer or just being less messy?

From here on out it’s all about managing your cashflow. if you use my guide of +50% rates, you will find your +4% annual pay rise will keep you ahead of rate increases. You will get squeezed on price rises of other things.

You have to make it to the other side though which is why cashflow matters. Avoid resetting your debt clock because then you are only managing an expanding income base coming from wage inflation plus payments ending.

[Mayday]

+0.25% so looks like the revised model is going to be right as it tagged the July rise. +0.25% in the 1st November meeting and we are done.

CPI is almost bottomed now which means the new leg up is in the near future. Toyota lead time down to 200 days so only 4x elevated from historic and mongs still think people will sell their homes to protect their Toyota lol 😂

Q3 GDP tracking positive. No US recession, it’s too late now and Biden will be smarter than 95% of people. Unemployment not cracked yet and timeline is 1yr to peak from when it does crack which generally aligns to a recession signal. We won’t see any recession until late 2025 into 2026.

S&P 5,300 target is before year end.

Equities have priced in 4% rates by end 2024. My revised model has 3.7%-4% in 2024. However the pattern we have with rates is not the norm so it’s an unknown how the Fed will react. target Fed rate is 9% in 2026.

We are euphoric bearish -5% from ATH and 98% calling for a recession. Property to new ATH in 2025 and people will be batshit angry…..Giddy up.

[SOMEPARTS]

+0.25% so looks like the revised model is going to be right as it tagged the July rise. +0.25% in the 1st November meeting and we are done.

CPI is almost bottomed now which means the new leg up is in the near future. Toyota lead time down to 200 days so only 4x elevated from historic and mongs still think people will sell their homes to protect their Toyota lol 😂

Q3 GDP tracking positive. No US recession, it’s too late now and Biden will be smarter than 95% of people. Unemployment not cracked yet and timeline is 1yr to peak from when it does crack which generally aligns to a recession signal. We won’t see any recession until late 2025 into 2026.

S&P 5,300 target is before year end.

Equities have priced in 4% rates by end 2024. My revised model has 3.7%-4% in 2024. However the pattern we have with rates is not the norm so it’s an unknown how the Fed will react. target Fed rate is 9% in 2026.

We are euphoric bearish -5% from ATH and 98% calling for a recession. Property to new ATH in 2025 and people will be batshit angry…..Giddy up.

Sticking your neck out in an election year is brave. Anything can happen and probably will.

[Mayday]

1.85T in treasury sale underway for Q3-Q4.

Looks like something big happened in oil drawdowns.

Looks like equity, oil and commodity ATH are in play now. Property ATH coming in 2025.

The most hated rally.

[TheGrinch]

fich downgrade...

bye bye USA