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Has the Fed seen enough bloodletting in the markets?

Posted on 5/11/22 at 2:37 pm
Posted by Street Hawk
Member since Nov 2014
3459 posts
Posted on 5/11/22 at 2:37 pm
Chamat P on the 'All In' podcast a few episodes ago seemed to think that the Fed would keep increasing the pressure until the equity markets have endured meaningful bleeding/pain. I think we are probably at that point now.

Chamat also thought that if the Fed kept the foot on the neck too long, they will force us into a recession, which might still happen anyway.

Do you guys think the Fed seen enough, or are there more 0.5 and 0.75% increases on the horizon?
Posted by TigerTatorTots
The Safeshore
Member since Jul 2009
80754 posts
Posted on 5/11/22 at 2:39 pm to
quote:

Has the Fed seen enough bloodletting in the markets?

No, Fed DGAF about the markets as long as inflation is running rampant.
Posted by Bdiddy
Member since Jul 2021
233 posts
Posted on 5/11/22 at 2:48 pm to
Sorry, but the fed rate increases are in the early stages. Five more increases are expected this year. I know that it seems ugly out there, but Biden is subsidizing wireless internet for low-income users. Good to know that he's got his finger on the pulse.
Posted by Chucktown_Badger
The banks of the Ashley River
Member since May 2013
31030 posts
Posted on 5/11/22 at 2:51 pm to
quote:

No, Fed DGAF about the markets as long as inflation is running rampant.


This is the answer. So what's gonna happen is they're gonna slam the economy and blast the market to get price spirals under control.

Looking at the "mandates that Congress gave"...price control and maximum employment (which they never fully defined), you could say the fed is doing about as poorly as is possible.
Posted by Chucktown_Badger
The banks of the Ashley River
Member since May 2013
31030 posts
Posted on 5/11/22 at 2:53 pm to
quote:

Good to know that he's got his finger on the pulse.


It's funny how the so called brightest economic minds fail to understand that nonstop printing of money and handing it out in return for no good or service produced/provided is gas on the fire of inflation. More dollars chasing fewer goods and services.
Posted by TigerFanatic99
South Bend, Indiana
Member since Jan 2007
27466 posts
Posted on 5/11/22 at 3:14 pm to
quote:

It's funny how the so called brightest economic minds fail to understand that nonstop printing of money and handing it out in return for no good or service produced/provided is gas on the fire of inflation.


Who cares about inflation when we have a proxy war to fund?
Posted by FlyingTiger1955
Member since Jan 2019
5765 posts
Posted on 5/11/22 at 3:14 pm to
No the Fed wants to drive the markets down. They want to get rid of as much wealth as possible.
Posted by LSUcam7
FL
Member since Sep 2016
7900 posts
Posted on 5/11/22 at 3:26 pm to
Mid-term elections will be a bloodletting for the dems, that’s for sure.
Posted by tigerfoot
Alexandria
Member since Sep 2006
56191 posts
Posted on 5/11/22 at 3:32 pm to
quote:

Do you guys think the Fed seen enough, or are there more 0.5 and 0.75% increases on the horizon?


There has to be increases. The Fed must try to check inflation.
Posted by flvelo12
Palm Harbor, Florida
Member since Jan 2012
3313 posts
Posted on 5/11/22 at 3:33 pm to
quote:

Mid-term elections will be a bloodletting for the dems, that’s for sure.


Believe it when I see it.
Posted by i know everything
Member since Dec 2021
3 posts
Posted on 5/11/22 at 3:48 pm to
The Fed Mandate is to address inflation and unemployment, not to bail out the stock market.
Posted by Diseasefreeforall
Member since Oct 2012
5481 posts
Posted on 5/11/22 at 3:54 pm to
It's easy to shite on Biden for good reason but the situation we are in is not just because of him, not by a longshot. The Fed bought and bought and lowered rates responding to covid and Trump signed the largest relief bill in history in March 2020. Plus it's hard to count all the other covid relief measures during both the Trump and Biden administrations.

How far in the red will we eventually be in the returns on those "investments"? The average person got something around three and a half grand in covid stimulus money counting tax credits and inflation will surely eat that up if it hasn't already.
Posted by UpstairsComputer
Prairieville
Member since Jan 2017
1567 posts
Posted on 5/11/22 at 4:30 pm to
This is a great response. Spot on. They are going to raise rates until something breaks... sorry, but 18% isn't broken.

And I'm not looking for downvotes, but this is the part that sucks for those in the very vocal "hold forever no matter what, markets only go up, who needs an advisor?" crowd. Until you've been through this with a bunch of money on the line, you don't really know how it feels to lose 100k, 200k+, etc. If you're in that crowd and you didn't lose a ton of money in 2008 you don't get to complain about losses now. When you start complaining, you've officially found your risk tolerance.

Side note: if you do have an advisor, and they can't articulate what they're doing to justify their fee... now you can cleanly fire them.
Posted by Jjdoc
Cali
Member since Mar 2016
53435 posts
Posted on 5/11/22 at 4:31 pm to
quote:

Do you guys think the Fed seen enough, or are there more 0.5 and 0.75% increases on the horizon?



They have already stated they are going to go at .50 for the next 2 meetings.

Posted by HYDRebs
Houston
Member since Sep 2014
1241 posts
Posted on 5/11/22 at 5:06 pm to
With the US dollar the strongest it’s been in 2 decades I just wonder at what level that will force the fed to reverse there current trend and stance
Posted by lynxcat
Member since Jan 2008
24121 posts
Posted on 5/11/22 at 5:51 pm to
It’s all unrealized gains and losses until you sell. I’ve lost six figures on paper so far but it’s not dollars that I have any expectation of needing to access for at least a decade or more.

Maybe that is a reflection of my “risk tolerance” but really it’s more about a fundamental belief in trusting the process of systematically investing every period and not reacting to marketplace swings in value. If we are 10+ years into the future and aren’t well past the highs of 2021 then the entire concept of investing will need to be rethought.
Posted by UpstairsComputer
Prairieville
Member since Jan 2017
1567 posts
Posted on 5/11/22 at 6:51 pm to
There are really three parts to tolerance. You are willing to take the risk, and you have the composure to hold through the downturns. The other part, ability, really has more to do with timeframe which is the easy one to explain.

I always thought you were some type of advisor though, or at least you have plenty experience, so no doubt you’re on top of this.

Composure is the one we are seeing pop up on MT 10x a day.
Posted by biscuitsngravy
Tejas, north America
Member since Jan 2011
2996 posts
Posted on 5/11/22 at 7:45 pm to
8% inflation report today, next CPI reading in a month. At least two more rate hikes incoming.. buckle up.
Posted by thelawnwranglers
Member since Sep 2007
38737 posts
Posted on 5/11/22 at 7:49 pm to
quote:

8% inflation report today, next CPI reading in a month. At least two more rate hikes incoming.. buckle up.


Are rate review monthly?
Posted by UpstairsComputer
Prairieville
Member since Jan 2017
1567 posts
Posted on 5/11/22 at 9:18 pm to
Yes. PPI is tomorrow at 730. Every month. You can look at econoday for the weekly calendar. There’s another one that slips my mind at the moment that’ll give a monthly calendar if you don’t want to watch so frequently.
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