Oil's tanking, yet the market's pricing in 1.5 Fed hikes this year. Some analysts now calling for three. Three!
I'm still in the no-hikes camp. Not just because inflation's cooling, but because of what's happening on the supply side — and because the Fed will likely shift from being purely reactive to actually looking ahead for once.
Markets love to overreact. Fed watchers love to sound hawkish after a hot data print. But policy works with a lag, and the lag is real. By the time you hike three times, you've already broken something.
Watch the supply side. Watch the data trends, not the headlines. And remember: the Fed's job isn't to chase every wiggle in CPI. It's to avoid doing something stupid.
I'm still in the no-hikes camp. Not just because inflation's cooling, but because of what's happening on the supply side — and because the Fed will likely shift from being purely reactive to actually looking ahead for once.
Markets love to overreact. Fed watchers love to sound hawkish after a hot data print. But policy works with a lag, and the lag is real. By the time you hike three times, you've already broken something.
Watch the supply side. Watch the data trends, not the headlines. And remember: the Fed's job isn't to chase every wiggle in CPI. It's to avoid doing something stupid.