Hartnett Says "Fed Tolerating Higher Inflation" Target
Here's an excerpt by ZeroHedge from their analysis of Hartnett's latest Flow Show titled "Goldishocks"
ZeroHedge: "From Goldilocks To Goldishocks" As Fed Quietly Raises Inflation Target Above 2%
It is this expectation of Fed starting the next easing cycle… which to Hartnett suggests that the Fed is tolerating higher inflation (which also eases the record US debt burden at $34.5 trillion) and has tacitly accepted a higher inflation target than the historical 2%, just as we said it would two years ago...
This is in stark contrast to Powell's stated objective in June of 2022 below in which ZH quotes (in caps) and predicts (lowercase) a future fast approaching.
Which brings us to this video walkthrough interpretation excerpt of Hartnett's report
Video Summary:
Authored by GoldFix ZH Edit
For The Fed to witness recent harsh inflation upticks and offer little to no pushback against it or for that matter the market’s persistent expectations of rate cuts means implies a tolerance for a higher inflation level is here.
- It implies the target has been raised if not completely discarded.
- It also means the Fed is worried more about recession than inflation now.
The market sees this and is betting Powell has thrown in the towel on his 2% inflation target.
Hartnett’s Flow Show analysis goes through the signs this is in fact happening
Hartnett’s Key Insights:
Fed may be more worried about Recession than Inflation for three reasons:
- because weaker Jobs implies recessionary slowdown
- and because the STIRS market continues to think Fed will ease in June despite bond yields creeping higher, exploding Gold and BTC prices
- Fed also not doing much talking down rate cut hopes yet
Therefore: market sniffing out Fed tolerating higher inflation targets. His forward-looking indicators are now starting to point to Stagflation as the risk as a result.
More here
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