FOMC Preview: “It’s Like The Titanic Running At Full Speed. In Fog. At Night”
Presenting the boldest FOMC preview from repo guru Scott Skyrm of Curvature Securities
There’s an FOMC meeting this week and we are expecting a policy statement at 2:00 PM on Wednesday. Many commentators are calling this FOMC meeting the “most important” in recent years.
Big picture … did the Fed move the goal posts?
Let’s look at some numbers.
Monthly inflation: wage growth +.5%, PCE +.7%, PPI +.6%, CPI +.7% – these are real scary when they’re annualized.
GDP is projected to be 6.4% and the unemployment rate is projected to be 5.5% at the next report.
With these numbers, U.S. monetary is still “all in.”
Overnight rates are at 0% and QE running at $120 billion a month.
On top of that, there will be more stimulus as the economy continues to reopen.
In my book, this economic situation calls for attention.
It’s like the Titanic running at full speed. In fog. At night.
Perhaps it’s prudent to ease up on the throttle.
Tue, 06/15/2021 – 10:50