Joe Lange:
Spit Ball
Here’s why I believe the Fed hasn’t said anything after their emergency meeting and won’t next week either.
There is something going to happen on Friday which is a huge deal but nobody is talking about.
On Friday the PCE price index comes out.
What is it?
The Personal Consumption Expenditures price index.
This is the real inflation number the Fed is watching, not the CPI number which is manipulated and includes things the Fed doesn’t care about.
Why is the PCE price index important?
What is the Personal Consumption Expenditures Price Index?
A measure of the prices that people living in the United States, or those buying on their behalf, pay for goods and services. The PCE price index is known for capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior.
This is the number that captures how Americans are spending their money on all goods and services and how it’s changing their spending habits.
The last number was at 5.8%
That’s three straight months over 5% which is bad.
The next PCE number comes out on Friday February 25.
The Fed is waiting to see that number.
If it’s at 6% or more the Fed will panic.
It will trigger one of two things.
Both of which the market is not prepared for.
1) An immediate rate hike of .25%
2) A rate hike of .5% in March.
Both are losing hands.
The Fed is either trapped in a no win situation where they will bring everything down or they are doing it on purpose because Trump controls the Fed and is exposing and crashing everything down on the democrats in order to replace it which is what I believe.
Watch the PCE number on Friday.
My bet is Powell speaks up after that number comes out and Biden and the democrats are screwed.
