And I’m a broken record
Why am I starting to sound like a broken record? At least when it comes to the Fed and Wall Street media. The same criticisms, over and over. Is it just me, or is it because they keep making the same mistakes over and over?
Take my post of October 4. Three months later, and it’s the same story. After another strong jobs report, Wall Street media are ratcheting down expectations for Fed rate cuts. If there’s any difference, it’s that there aren’t much left to cut. Some finally allow there may not be any more rate cuts in the next few meetings.
And why the obsession? I’ve been saying literally for years, pay no attention to the Fed and media talk about where rates might be headed. Instead watch the bond market. Investors that have been following the media narrative are up to their necks in stocks, because rate cuts will make them go up. And it’s costing them. Investors that have been watching the bond market and seeing rates go the opposite direction are positioned more cautiously. Why do the media do that? Are they deliberately trying to mislead investors?
If they aren’t, they’re sure doing a good impression of how they would act if they were.
And what is the Fed’s excuse? Rate cuts, really? Why? Even when it made its first (outsized) cut, inflation, even the lagging data they follow, was still running well above its own inflated targets. Unemployment still near multi-decade lows; 4.1% according to this morning’s release. This is no mere Monday morning quarterbacking; I’ve been challenging the case for easing since it first came up. And the data have been vindicating it. Here we are, with the Fed still slowly, bit by bit, being dragged kicking and screaming into acknowledging that the whole easing project is off sides.
Either the Fed is wrong or the bond market is wrong, and it’s not the bond market.
Strong jobs report backs case for pause in Fed rate cuts
This Bloomberg TV headline is typical. Notice how even now, the rate cut narrative persists. There may be a “pause” in the rate cut program. But that there is a rate cut program is assumed. CNBC, Fox Business, all the Wall Street media are on the same page. In one breath, they are giving the Fed its marching orders and sending a buy-don’t-sell message to their “retail” investor audience.
This can’t be accidental. I called out similar subtly manipulative headline language in my October 4 post. There, “higher-than-expected non-farm-payrolls print would have the Fed rethinking the pace of its rate cuts”. Similarly, while the pace of cuts may be open to question, that there will be cuts is not.
That this is not simple, innocent, just-the-facts reporting should be lost on no one.
More media propaganda. In reference to the TikTok case:
Reporter: Do you think the national security concerns outweigh the first amendment issue?
This is taking sides. Tiktok claims there is a “first amendment issue”. That remains to be decided by the court. This “question” is a disguised statement that there is a first amendment issue.
Of course there isn’t. Whose speech would be silenced by the government? Tiktok parent ByteDance is free to sell Tiktok to another party. It doesn’t want to.
What next? Will Nippon and US Steel claim their deal must be permitted on the basis of free speech?
Not to mention TikTok users have ample other venues via which to express their “speech”. One’s right to free speech obligates no one else to provide them a megaphone.
As an aside, it would hardly be a loss if TikTok did just go away. It’s a cesspool of cultural rot. It corrupts our kids. There. I just exercised my right to free speech.
China said “No”
https://www.youtube.com/watch?v=WI-KHKYTwak&t=31s
we should have a betting pool on when the fed will do its first HIKE of the next cycle. i’m struggling with whether to take the over or under on whether it’s this year.
My wager would be the Fed itself doesn’t even know. Whatever is going to happen to interest rates, the last place to look for guidance is the Fed. No, the worst place would be media commentary about the Fed.
The bond market is the authority. The Fed should tighten, whether with higher rates or more balance sheet trimming. As of the December report, three month annualized CPI is running at 3.65%.