Over the last week we have seen a huge ramp up with the cut jumping from 25 basis points to 50 basis points. In line with market expectations that was announced minutes ago. HOWEVER, the kicker is the Fed has waved its white flag on the joke that was the 2% inflation goal.
Why do I say this? Because in this announcement they made one comment that only shows that 3% is the new 2%
The committee expects the long-run neutral rate to be around 2.9%, a level that has drifted higher as the Fed has struggled to get inflation down to 2%.
Along with other comments like
Moreover, the Fed chose to cut even though most gauges indicate inflation well ahead of the central bank’s 2% target. The Fed’s preferred measure shows inflation running around 2.5%, well below its peak but still higher than policymakers would like.
Changes in tone here while they sound good show that the Fed is already thinking of when to tell us it is now 3% instead of the 2% Powell was hell-bent on getting us to. They even lowered their predicted inflation for the year in this meeting as well to 2.6% for core EVEN THOUGH THE DATA SAY NO.
Hoenstly... jail jail for all of them.
