Another .5 joke of an increase announced today..and the market goes up
Well, I expected more pain given all the retail reporting that is doing just as bad as the earlier ones that had a very negative reaction.
Although a relief rally would not be out of the realm of possibility given the historic 7 straight weeks of decline.
However in June we get a 0.5-0.75% hike AND the start of QT which I've seen as the equivalent of a 0.5-0.75% rate hike. So there might be the effective result of a 1-1.5% hike starting in June and going further. If that's true, I can understand their fear of going past that in one month. Though they are in a real hard place because they delayed so long. They might have to do things they'd prefer not too because they are so late.
I think they still think they don't have to go down that far and still hope that some of the supply chain tangles get unscrewed and that will help ease inflation as well.
Also, "inflation" is measured YoY. So they will start getting better numbers over time as out previous year inflation at a given month will already have started rising so the increase will appear numerically lowering in comparison. So we will soon get to a really annoying time where officially reported "inflation" growth rate will go to 2-4% and the Fed will declare victory, but actual prices will not have lowered at all.
Regular folks aren't going to care about clever numerical statistic trick. The will care about no longer being able to afford their groceries like they could a couple of years ago.
