{"id":65168,"date":"2023-03-14T07:32:58","date_gmt":"2023-03-14T12:32:58","guid":{"rendered":"https:\/\/olduvai.ca\/?p=65168"},"modified":"2023-03-14T07:32:58","modified_gmt":"2023-03-14T12:32:58","slug":"for-fed-what-happens-today-more-important-than-mondays-mayhem","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=65168","title":{"rendered":"For Fed, What Happens Today More Important Than Monday’s Mayhem"},"content":{"rendered":"
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For Fed, What Happens Today More Important Than Monday’s Mayhem<\/a><\/h3>\n<\/header>\n
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It was clear from the get-go that Monday would be mayhem for the markets<\/strong>\u00a0– and as it turned out, it proved a lot more than that, with two-year Treasury yields collapsing the most in decades.<\/p>\n

At stake was not just the integrity of the financial system, but also the availability of liquidity.<\/p>\n

\"\"<\/picture><\/a><\/p>\n

Bloomberg cross-asset strategist, Ven Ram, notes that a<\/em>s of the start of the European morning,\u00a0the markets appear a lot calmer,<\/strong>\u00a0with Treasury yields having barely moved, the dollar attempting to claw some way back and stock futures a lot less jittery.<\/p>\n

Shortly, we get the readout on inflation for February, with the median estimates for on-month and on-year numbers forecast to show a deceleration.<\/p>\n

There are two ways this could play out from the Fed\u2019s perspective.<\/strong><\/p>\n

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Scenario I:<\/strong><\/h3>\n

The tumult in the markets continues, centered on concerns about the soundness of other regional US banks<\/strong>, liquidity ebbs – as it always does when the markets need it the most!<\/p>\n

In such a scenario, what happens with the February inflation prints becomes a sideshow<\/strong>.<\/p>\n

In other words, even a surprise, higher-than-forecast print won\u2019t bother the Fed much.<\/p>\n

After all, inflation is a pre-existing problem – and the Fed has time to battle this<\/p>\n

Scenario II:<\/strong><\/h3>\n

If the market jitters calm down, the inflation numbers – together with last week\u2019s payroll data and upcoming retail-sales data – will take regain their predominance.<\/strong><\/p>\n

Even so, the chance of the Fed raising rates by 50 basis points is\u00a0pretty much zilch.<\/p>\n

Calming the markets about the prospect of a systemic crisis towers head and shoulders over inflation fighting from the Fed\u2019s perspective.<\/strong><\/p>\n

After all, when a patient suffering a chronic condition meets with an accident, you treat the patient for life-threatening injuries first.<\/p>\n

The long-stay illness isn\u2019t the priority of the hour, as every good doctor knows.<\/p><\/blockquote>\n

\u2026click on the above link to read the rest\u2026<\/p>\n

 <\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

For Fed, What Happens Today More Important Than Monday’s Mayhem It was clear from the get-go that Monday would be mayhem for the markets\u00a0– and as it turned out, it proved a lot more than that, with two-year Treasury yields collapsing the most in decades. At stake was not just the integrity of the financial […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[303,431,534,3650,4318],"class_list":["post-65168","post","type-post","status-publish","format-standard","hentry","category-economics","tag-fed","tag-interest-rates","tag-monetary-policy","tag-us-federal-reserve","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=65168"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65168\/revisions"}],"predecessor-version":[{"id":65169,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65168\/revisions\/65169"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=65168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=65168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=65168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}