Federal Reserve
The Federal Reserve it can be argued has done a great job of propping up the economy during the Great Recession with its easy money policies led by Quantitative Easing 1, 2 and 3. However, the growth in the stock market and the low interest rate on our ballooning debt is artificial as a result of the Fed's policies. Dialing back of their latest bond-buying program, is the finesse move confronting the Fed for the next five years. If the Fed moves too fast, it could cool the recovery. If it moves too slowly, it could fuel asset bubbles or excessive inflation. With the stock market booming since the election of Donald Trump, these fears are heightened.

CPI data is prompting many to say inflation has peaked. That may be so, but the details matter.

from The Gray Area:
Peter Boockvar gives us a quick rundown of today's inflation numbers.

Key Points:

  • Headline CPI was 7.1% in the year ended November, vs 7.7% a month earlier. Core CPI was 6% vs 6.3% the prior month.
  • Weaker energy prices helped the headline rate, but a rebound is likely with China on the road to fully reopening.
  • Housing prices are still rising, with Rent of Primary Residence up 7.9% year-over-year.
  • Core goods price increases moderated, helped by another decline in used car prices.
  • The Fed will still raise rates tomorrow, but this sets up the possibility of a smaller 25 basis point hike at the February meeting.
Boockvar believes the Fed is close to ending its rate hikes, but will continue with QE. He thinks the 2023 focus will shift to the economic consequences of higher capital costs as the Fed holds rates at this elevated level to keep inflation at bay. More From Boock Report:

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