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DK's avatar

Hmmm.

I am not so sure.

If we are saying the presidential election is one reason they are dovish

and

If we think this pivot (for a lack of a better term) will ignite inflation,

Then they have to change the narrative around inflation, no? Why? Because they kept saying the inflation is bad for the American people. Well, if it is bad, then this works against Biden and the establishment. So they will cut a little or not at all or hike.

Just brainstorming something here :)

Powell "But inflation is still too high, ongoing progress in bringing it down is not assured, and the path forward is uncertain. As we look ahead to next year, I want to assure the American people that we’re fully committed to returning inflation to our 2 percent goal.

...

keeping policy restrictive until we’re confident that inflation is on a path to that objective.

...

And, you know, if you have growth that’s robust, what that will mean is probably we’ll keep the labor market very strong. It probably will place some upward pressure on inflation. That could mean that it takes longer to get to 2 percent inflation. That could mean we need to keep rates higher for longer. It could even mean ultimately that we would need to hike again. It just is—that’s the way our policy works."

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James Fairbanks's avatar

Great as always Florian! Ill be honest FOMC really took me off guard last night, but ALAS we adjust. Onward and upward! Best of luck.

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