Daily Discussion - Wednesday June 01 2022

I agree a "soft landing", in all respects, is indeed their goal. They know the stock market feeds back into actual economic performance. (I once again forgot the term for this.. when stock prices become a self-fulfilling prophecy. Eg: higher price = easier capital = faster growth. And the inverse.)

The hard part is determining just how much of the market performance is directly related to their words and policies, and how much is actual bona fide "weighing machine" going on.

If I had to guess, I'd say they don't react to the market much (unless there is a crises) but instead stick to consistent messaging about long term goals. They nudge things a little bit once in awhile, but I don't think they are as fixated on SPY as the rest of us.

In other words.. just because you and I read deeply into any crumbs doesn't mean the Fed is placing them out there on purpose.

/r/Vitards Thread Parent