by Karl Denninger
Market-Ticker.org
The market’s reaction to the Fed Rate decision is utterly insane.
Obviously the market thinks rate cuts are imminent. There’s no evidence for this in the Fed Statement or data.
Specifically, the Fed strengthened its language on the job market in this statement, which would tend to remove said expectation, not add to it.
The Committee is strongly committed to returning inflation to its 2 percent objective.
Well, you’re not headed there with allowing the market to keep believing that which you don’t state, but which you also don’t strongly stomp on. That’s a serious problem for the economy generally because inflation is most-certainly not headed back to 2% when, for example, both car and homeowner’s insurance is rising at about a 20% annualized rate. May I note that automobile insurance is 2.8% of the basket all on its own so 0.5% inflation is represented by that even if everything else was literally zero!
