Fed minutes: what else is new?

Fed minutes show the hawking Fed fully feathered

They can’t be this dumb. So there has to be a reason why the Fed, despite myriad signs of economic and inflationary deceleration (inflationary operations created the post-pandemic economy after all), keeps going full speed ahead. You can click Powell’s mug to read the article.

I call them eggheads in a condescending way, but they are not so academic as to be completely out to lunch. Still, they are focusing on the lagging CPI (on deck tomorrow) and probably the fact that Joe and Jane Public are still completely up in arms about inflation. It can’t hurt that the Biden admin and democrats are claiming to be whipping inflation with the recent spending package. Ha ha ha.

From the article:

“Participants observed that inflation remained unacceptably high and well above the Committee’s longer-run goal of 2 percent,” the minutes said. “Participants commented that recent inflation data generally had come in above expectations and that, correspondingly, inflation was declining more slowly than they had previously been anticipating.”

They are not looking at the trends, obviously. They are either dumb or scared. I think it’s the latter. The Treasury bond market – as represented by our ‘Continuum’ chart – is the funding source of decades of inflationary operations. I think that they feel that unless this be the final inflation, they’d better tame it but good (as in tank asset prices all around). Meanwhile, the Fed continues making cash more valuable and I continue saying thank you.

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