All the attention is on inflation. Fed Chair Powell was in front of Congress this week explaining what the Fed is going to do to bring it under control.
In this video I discuss how the Fed's sole focus is on the Phillip's Curve, a model that is long shown to be inaccurate. For that reason, we are not going to see a soft landing. The challenge is the Fed, in an effort to curb inflation, is risking an increase in deflauts. This is going to really stymie the economy.
Hence, by the Sept meeting, my forecast is the Fed is reversing course with their hawkish stance.
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BEER.first time I read about that term of Phillip Curve I will try this weekend to read and learn more about the subject. But we do know inflation well and the truth is that it is detrimental to us, the final consumer, since it contracts the economy.
The system is way too complex but I also think the rates will go down. It just doesn't make sense because there are only so many dollars out there and they are only created when loans are made.
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