Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

The Fed’s Inflated Cake

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A stroll through recent and not so recent inflationary history

A Cynical Fed is a Dangerous Fed

On ‘Fed minutes Wednesday’ the media amplified the noise, the machines are doing what the machines do and running with it, and it’s all eyes on the great and powerful Fed (of Oz).

The Fed created the cyclical inflation (in NFTRH we detailed and managed the process successfully in real time) and thus the Fed created the cycle. In 2021 the Fed was exposed to the public as the agent of inflation it actually is, and when the inflation threatened to get out of hand they went into damage control mode. Now the Fed is trying to cool the inflation, which means cooling the cycle itself. You can’t have your inflated cake and eat it too. Not when the racket is exposed to the public.

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Friend or Foe?

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What a nice way to start the week! On Sunday, the Satanic Dark Majesty figured they’d try to make a new lifetime high (circled part) on the ES (see arrow), but they just couldn’t do it. As I (nervously) woke up this morning, and ES was up only 10 points, and then up only 5, and then it all became my favorite color. The “end of year melt up” that the criminals at Goldman Sachs keep promising still hasn’t materialized. Santa Claus can seriously bite me.

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The Turn

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The two important headlines I saw today both came from Our Dear Leader Powell.  In his testimony today, Chairman Powell declared that “It is time to retire the word transitory regarding inflation”, and “the threat of persistently higher inflation has grown.”  Finally, he added that the Fed “can consider wrapping up the taper a few months sooner.”

The fact that inflation is here is no shock to the average American, but to hear it come out of the Fed Chairman’s mouth was a bit shocking today.  Also, the idea of speeding up the taper has not been priced into markets.  I believe soon we’ll be hearing Chairman Powell begin to broach the topic of raising interest rates sooner than expected as well.

So, what does this mean for markets going forward, and are we at a key turning point?  If the Fed is now moving to a stance of acknowledging a persistent inflation problem, logic would dictate that a policy response would follow.

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