Dow crashes 1276 points after inflation data – what does Orr do?
Blood bath on Wall Street today as the enormity of the inflationary pressures mounting against the American Economy became apparent with a surprise result on inflation…
Stocks tumble in worst day since June 2020
US stocks plummeted in their worst day since June 11, 2020 after key August inflation data ticked upward, surprising investors.
The market is worried that hotter-than-expected inflation will prompt the Federal Reserve to raise interest rates more aggressively, inflicting serious damage to the US economy in the process.
The Dow was down 1276 points, or 3.9%.
The S&P 500 fell 4.3%.
The Nasdaq Composite tumbled 5.2%.
…Adrian Orr has come back from Jackson Hole with a far more hawkish stance…
Reserve Bank governor’s tone turns hawkish
How has Reserve Bank governor Adrian Orr’s trip to Jackson Hole influenced his thinking?
Mortgage holders, secretly hoping an economic slowdown will see interest rates fall soon, may be out of luck.
…you can’t print $25 Trillion in quantitative easing that artificially creates the lowest interest rates since Mesopotamia and not expect a 1929 level crash.
The grim reality facing Reserve Banks around the world, is how to crash the economy to save the economy.
With China going into another Covid lockdown until November to ensure Xi is not embarrassed by an outbreak during the all important November Congress, and Russia likely to get more violent in the Ukraine on top of ongoing climate events interrupting the agricultural calendar, the real damage from inflationary pressures has yet to hit us.
Orr either risks getting ahead of the Markets now with 75 surprise rates as the new 50 and a new 6% target quicker or he risks being swamped in December.
The Black Swans are all in Ubers and heading over to our place now.
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“The Black Swans are all in Ubers and heading over to our place now”
No matter how bad it gets Mart you are always able to make us laugh!
Firstly, it’s Maori language week so expect a long preamble that no one understands but certainly makes the Financial experience Free zone of the Reserve Bank Board feel warm and fuzzy.
Then expect a 0.5% rise give or take because a trained monkey could probably do the job of pressing keys equally well.
Huh??
https://www.newstalkzb.co.nz/news/business/reserve-bank-governor-adrian-orr-shares-maori-perspectives-with-central-bankers/
“ “The Reserve Bank is akin to being the Tane Mahuta of New Zealand’s financial landscape,” he said.
“Our roots are our legislation, outlining our purpose and giving us strength (legality and operational rights) and wellbeing (resourcing).
“The money we print and circulate for New Zealand is the sap that flows through Te Putea Matua, ensuring New Zealanders have a means of exchange, a story of value, and a unit of account they can trust.”
He said the complex payment system was the trunk. It allowed the money to flow to the branches of the bank, which were the financial institutions that had chosen and were allowed to operate in Aotearoa.“
Eg: he’s woke as fuck and more interested in cultural correctness than his own questionable decisions or answers to our problems.
Nailed it!
LOL
I love seeing n hearing te reo all over the place, despite only being able to pick out a few words and phrases here and there. It’s the least we can do to revive the language that is so deeply part of Maori, our brothers and sisters in this land. Reclaiming te reo will help heal our country. A few more generations down the line when more and more people can understand it, well, that will be awesome!
‘crash the economy to save the economy’
This time I would say China and Russia don’t want that to work
Odds on now that Powell raises rates by 100 bp (i.e. 1%) in the next Fed meeting, which is why the US markets dived. I think Orr will follow suit here, since all US inflations seems to migrate here too (three cheers for globalisation!). So much for that promised “transitory inflation”, huh?
Don’t get stressed it went up 5% just prior.
Bit like the house market really, losing money you never really had. Wait till it goes below the low point of pre pandemic then you are starting to lose real money.
Agreed. The DOW Jones low to look out for imo is ~18K (which it dropped to during covid max media/govt hype), which is still a massive drop from here. I’d be surprised to see it happen this year with the US midterms just around the corner.
2020 is so like the first energy crisis I experienced in 1972. The difference is that this one is entirely self inflicted.
Expect roaring inflation and staggering economies for about a decade.