The murmurings and chatter on the Federal Open Market Committee (FOMC) mistake in the making are gaining. These just since the weekend, for example:
- Fed whisperer Timiraos tweeted on how the Fed might be tightening policy too aggressively
- Ray Dalio says "the short-term interest rate is now about right"
This on inflation from,
JP Morgan:
- Saying that "the case for a sharp inflation drop builds", citing:
- “falling energy.. and easing bottleneck pressures.”
and forecast:
- “we project global inflation to slow below 4% in the three months through September—less than half its pace in the previous year
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Pantheon (economic consultancy firm):
- It’s important to appreciate just how fast inflation could fall across the next year or so, thanks to margin re-compression — from wildly elevated levels — and plunging food and energy inflation
- Our current base-case forecast is that headline CPI inflation will drop below 3% by the middle of next year, from 8.3% in August, but a sub-2% rate is entirely possible
Markets are sniffing out a potential 'pivot' from the Federal Open Market Committee (FOMC). Officials from the Fed have been respolute with their aggressive rate hike calls though, this'll surely have to change. Having said that ... they are a stubborn bunch (they stuck to transitory for sooooo long ... a terrible error).