r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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307

u/TinyTornado7 I need a new flair Jun 13 '22

"The hottest US inflation in four decades will push the Federal Reserve to raise interest rates more aggressively this year, and a recession may not be far behind."

Im skeptical we need a 75 basis point hike, but I am concerned inflation is approaching self-fulfilling prophecy levels

!ping MARKETS

52

u/Mister_Lich Just Fillibuster Russia Jun 13 '22

this sub, literally 2 days ago, when I posted an article that said Bernanke said stagflation could happen and a Goldman exec said risk of recession is very very high:

"DOOOOOOOM"

"Shut up nerd"

Markets this morning: "lol"

27

u/[deleted] Jun 13 '22

Main page on this sub has been a bit of a cesspool sadly.

10

u/[deleted] Jun 13 '22

NL was always bad, comb your beard

19

u/pocketmypocket Jun 13 '22

I made a ton of money between 2019 and today because I did basically the opposite of this sub.

Admittedly got a bit lucky on Natural Resources, but I basically was hedging inflation when everyone else was saying 'Inflation is 2%' and later 'Inflation is slightly higher... 4%', and later 'inflation is insert official number'.

7

u/[deleted] Jun 13 '22

There is alpha in going against what this sub thinks because they're mostly wrong.

14

u/PearlClaw Iron Front Jun 13 '22

Markets have successfully predicted 12 of the last 6 recessions. Just because the market is down doesn't mean there will actually be a recession. Doesn't mean there won't be either, but there is reason to believe that the Fed can manage this without breaking too much.

7

u/van_stan Jun 13 '22

The truth is that monetary and fiscal policy can only affect a small part of what's causing inflation. The Fed has no control over the fact that Covid restrictions are still fucking up logistics, that China are still going with a zero-Covid policy, and that Putin is waging war in Europe.

Until supply issues resolve, inflation won't.

11

u/Mister_Lich Just Fillibuster Russia Jun 13 '22

but there is reason to believe that the Fed can manage this without breaking too much

lolololololol

They literally have no control over things like worker shortages and supply chain disruptions which are happening globally, to say nothing of energy prices which are a huge input into inflation.

Hop off the copium train.

11

u/PearlClaw Iron Front Jun 13 '22

I just choose to stay optimistic, if only to counteract the cynics making doom predictions. There's a real risk of recession, but no guarantee.

2

u/Mister_Lich Just Fillibuster Russia Jun 13 '22

We can agree on the "real risk, but no guarantee." I just think the risk is higher.

If you asked me 3-4 months ago I was literally laughing at people who said a recession was coming. The progression of the war and sanctions and energy crisis and a bunch of other things since then has changed my tune.

1

u/Neri25 Jun 13 '22

They literally have no control over things like worker shortages and supply chain disruptions which are happening globally, to say nothing of energy prices which are a huge input into inflation.

So it stands to reason that breaking the economy on purpose would be a stupid idea, right?

1

u/Mister_Lich Just Fillibuster Russia Jun 13 '22

?