Showing posts from April, 2023

Why the Federal Reserve will have to cut rates sooner than we think

​ Predicting the Fred’s next move given an unusual combination of a banking crises of trust, high headline inflation, a jobless number that whether is high of low will have to be judged in the context of the banking and potential liquidity crises and thus might seem like a flip of the coin, and a array of international uncertainties from the Ukraine war to the BRICS countries announcing a new currency to bypass the Dollar as a reserve currency has most economists heads spinning. While we live in the land of VUCA - Volatility, Uncertainty, Complexity and Ambiguity - it seems that two factors will result in the Fed needing to slash rates by the end of the summer.  I. Inflation isn’t as high as you think it is  While inflation still looks like a sleeping dragon, if we look at the rental component of CPI the real inflation number adjusts downwards significantly.  The rent component of CPI is 33% of the headline CPI number, food is already dropping,  The method of measuring rental costs by