And yes like the days of olden, the elder Chairman of the Fed shall climb to the mountain top and there he shall find and obtain the greater knowledge. Ye, the masses of his herd, shall submit to his data and accept his way.
Or else he’ll confiscate your Bitcoin.
Today is Fed Day and much like Mel Brooks classic scene in History of the World, Part 1 the Fed will issue its edict and people will try to read into every comma, period, and sentence. Then the usual staged press conference which will attempt to project a more personal view of St. JayPo and his minions with nothing of any importance being said other than inflation sucks and rates are going up.
The Fed will raise rates 75 bps, there will be vague hints at future actions but in the end there is one thing they must avoid:
The Trap Door
As reality on the US economy sets in, equity markets are being supported for political not economic reasons as Americans prepare to vote, or vote twice, in the midterm elections. Thus if anything other than the bland phrase “data dependent” is mentioned today, things could get real ugly to the downside or real stupid with a “new bull market” nonsense being uttered by the talking heads again.
The Fed has to avoid the trap door in markets however as illustrated best by the S&P 500 in this chart:
Any break below 3200 and the bottom will fall out opening the door, literally, with a rapid retest of the 2500 level and creating greater issues for Western central banks other than the 1970’s style stagflation the economy is now starting to experience.
Meanwhile, enjoy the video from the last Fed meeting:
Weird. It looks just like the previous 100 meetings.
America had best hope this current bird flu wiping out the chickens in Iowa doesn’t make it to the Fed’s coop.
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