One more to add
Corporate debt wall is approaching. Between now and a year from now billions in corporate debt has to be refinanced at rates 2-4x what it was before.
Like I said a couple months ago. Fed is up against a wall with zero options. And they know it.
- Keep rates high or raise rates = kill regional banks, CRE (entire housing market will be affected), and debt riddled corporations. Also deepens the losses of the FED and risks even worse financial calamity in the future.
- Lower rates marginally = lipstick on a pig. Might kick the can slightly. Doesn't solve anything. Same problems tomorrow as today.
- Slash rates in half or lower = Save assets and corporations encumbered by debt but create the next wave of massive inflation. Rich get richer and poor get poorer at a time where the imbalance between the two is at historic levels. It will be 2022 again within 1-3 years but on a 5x scale.
Powell has said publicly that some regional banks will go under. This indicates the FED is going to keep rates higher longer and do option 1. But he talks out of both sides of his mouth, and historically, when push comes to shove, the FED always does everything in its power to protect banks. If the recourse from option 1 starts stinking too bad, they immediately switch to option 2 and the entire house of cards will fall.
"H-A: In return for the flattery, can you reduce the size of your signature? It's the only part of your posts that don't add value. In its' place, just put "I'm an investing savant, and make no apologies for it", as oldarmy1 would do."
- I Bleed Maroon (distracted easily by signatures)