This time it IS different. Look at fed's balance sheet for example. They maybe keeping rates same but money supply is dropping as fast as it went up in the last year.
Many regards hope that they can time.the market. WSB wisdom is that after fed eases rates there is a high chance of a crash. It can be a month or a year.
I strongly believe that this time with higher for.longer policy, there will be a correction this year. Velocity of M2 is plateauing before it reaches pre-covid level.
This is my 2 cents, food for thought if you will.
I will show my smooth brain out now
Unpopular opinion: Fed is waiting for a crash to relax monetary policy. They won’t drop rates or start QE until the markets crash.
byu/DieCastDontDie inwallstreetbets
Posted by DieCastDontDie
33 Comments
Perhaps DieCastDontDie should heed the words of Charles Mackay and remember that “Men, it has been well said, think in herds.”
I do find it hard to believe that the fed would risk a crash in an election year. Probability would cost them with no more invites to the Biden block parties where Joey Joe always drops his newest beats.
Could be. If they cut rates in half then half a crash, they would have to go straight to zero again.
Yes, this is how monetary policy works….
[deleted]
Market too strong calls it is
You’re partially right, but for the wrong reasons.
They will cut because the economy has come to a grinding halt.
The stock market crashing is just an effect of the economy slowing, but it isn’t in any way a driving factor for whether they raise or cut.
“This time it IS different”
-Wallstreetbets
They will cut when unemployment starts rising. Hopefully, they won’t wait too long as inflation will (likely) still not be down to 2%.
4.5% unemployment with an up trend would be the right time, but if they wait until 5%, we’re screwed by long and variable lags.
Yep, this is the only way we’re really going to see inflation go down. We’re close to spending $1T on interest alone which will definitely be printed. Anyone thinking rates will go down before shit breaks is delusional and or has no idea how macroeconomics works. Willing to bet we’re going to see rate hikes at the end of the year if nothing breaks.
That said, nobody on this sub wants to hear this painful truth. People would rather pretend this is all normal and ATH’s every month part of the norm — let them. They’ll be the ones losing when this thing goes bust and it will.
There’s no “ifs” in this equation anymore. That has been gone for over a decade now. It’s the “when” in all of this that means the most.
Many people here can’t understand this and still think inflation is going down, rate cuts will happen and markets will keep hitting new highs.
Same exact mindset before 08’.
People still drunk on zero rates & an easy job market. The Fed & bankers created this illusion when the banks committed whole sale fraud in the housing market in 2007
The economy needs a reset. What good is an economy when so many people have so much money that inflation at 4 or 5% didn’t impact spending. We need a hard reset that hurts the massively large 401k growth that has occurred
✍️Nov-6. Something happens day before….
The market will hold until I give up my cash position and give into my FOMO. I’m singlehandedly propping up this market. This is the last quarter to have your calls print. You welcome.
They’ll lower rates if inflation gets below 3%.
Why doesn’t anyone believe what the fed says? They’ve said exactly what they were going to do for the past 2 years and done exactly what they said.
Agreed,,my opinion also
In an election year? pshh…okay
There needs to be some wealth destruction for inflation to go down. There is no scenario in which asset value can continue to increase without inflation also increasing.
They will never drop rates if that is true. The market is never going to crash again.
Probably not that unpopular, but I had to remember that the Fed does Open Market Operations (OMO) in the first place.
Mediterranean fast-casual food chain Cava Group reported first-quarter earnings and sales that both beat Wall Street expectations.
Still, the stock tumbled 6.6% on Tuesday in after hours trading as same-store sales growth slowed, with consumers reducing spending on dining out.
CAVA recession, rate cuts where
Time for me to get comfortable at the local Wendy’s dumpster. At this rate I’ll never afford the chick-fil-a dumpster 
They don’t want to crash the market with their rate cuts, rate cuts crash the market. Quite the predicament. Calls it is!
This mfer learned what the fed was like three months ago, now he’s predicting monetary policy.
they will do one nominal cut this fall to satisfy election politics for their candidate. Expect QE next year as we are cutting into a recession – all the data is total bs and you know it by having a life and paying your bills. They can’t crash the market as it would be detrimental to Bidet’s campaign but after the elections – all bets are off. Remember, The Fed makes money with only one tool – DEBT and they need to justify the helicopter. At this point there are no more economy cycles, only fed cycles. With debt levels these cycles will get more and more violent. Reverse repo shows they have stopped draining for the time being. They have other forms of easing which they will use to get by November. My bet is on making new highs in the market 10-15% from here before you will see a big drop but it is coming that is almost a certainty
I don’t know. Seems sus.
No shit; hey what stock gets you banned around here for mentioning?
What is the correlation of the velocity of M2 money with the equity market?
High Inflation -> Raise Rates
High Unemployment -> Cut Rates
It’s not that complicated
unemployment rise could trigger a cut, which means they were too late
It’s already crashing upwards.
They lower rates when they decide to lower and they can make some excuses why they gonna do it
You cannot build back better until after you break it