US April Hot Inflation Report - So when will the FED tigthen? (RTT Plus)
Created on: 5/21/2021 2:20:51 AM
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 When inflation is hot (CPI) the normal reaction is call for higher interest rates.
The FED does not want higher interest rates.
They want inflation to inflate asset prices to deflate the debt away.
The FED will only raise rates when their political masters allow them to, and as the mid terms are coming up in Nov 2022, do not bet on the FED raising rates (or reducing their balance sheet) any time soon.
You can watch the FED FUNDS Rate to employment here (RTT Plus >> RTT charts), the FED is already lagging, just like after 2009 March low.
Mohamed El-Erian doesn't think Fed will prematurely respond to high inflation
Extract .."no action from the FED for many months"...
and Stealth Yield Curve Control is already active.
Of course if the FED did tighten then risk on markets will fall 15% to 30% and you can bet the FED will print baby print just like they did during March 2020 COVID scare.
RTT's research suggests the FED has chosen to let inflation to run hot (CPI > Interest rates [or negative yield]) for some time, for the benefit of risk on investors, of course the release valve will be a lower US dollar and bond holders getting crushed.
Hedge Fund guys are dreaming of FED tightening (higher interest rates or balance sheet reduction) to allow them to load up into the hot trends (or get out of bonds), as they know the SP500 COVID March 2020 'v' reversal would be a great way to profit.
Like this guy ...
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Richard D Wyckoff
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Benjamin Graham
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Ayn Rand
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