https://marketrebellion.com/news/trading-insights/between-the-lines-the-shockingly-dovish-news-hidden-in-powells-december-fomc-speech/
So, when you hear the economists predicting that inflation could reach 2% by mid-year 2023, it isn’t just wishful thinking. It’s a tactful analysis on the impact a slowing economy, lagging rate hikes, recessionary fears, and a 40-year-high relative comparison (mid-year was the inflationary high of 2022).
The bottom line: Powell saying that Fed will consider cutting rates when the Fed is confident that inflation is “moving towards 2%” is like saying, “Forget everything I said about staying the course. Forget about ‘higher for longer.’ We’re turning the money printer back on sooner than you think.”
Article makes the point that high YoY inflation comparisons will likely take us to lower CPI readings, and consequently give Powell room to cut rates.
Do you agree with this?
