fed neel kashkari calls doge

While it’s true that wages aren’t keeping pace with headline inflation at 9.1%, wage growth is definitely accelerating to try and keep pace with rising prices.

In the pre-Covid regime, pay was rising at a pretty stable rate of between two and three per-cent. That’s not the case anymore…

Source: US Bureau of Labor Statistics

So, people are still spending, employment is increasing, and wages are rising… Funny looking recession you’ve got there…

No Recession, No Fed Pivot?

There are definitely signs of a slowdown but it’s almost impossible to reconcile the technical definition with reality. There are recessions and RECESSIONS.


Federal Reserve Bank of Minneaopolis President Neel Kashkari took a jab at Dogecoin (DOGE) last week by referring to the meme coin as a ponzi, upping his rhetoric against cryptocurrencies.

Kashkari’s comments were in response to a LinkedIn poll by Paul Grewal, the chief legal officer and corporate secretary at Coinbase, asking his connections about the proper way to pronounce Doge.

“The right pronunciation is pon-zi,” Kashkari quipped.

This isn’t the first time Kashkari has taken aim at cryptocurrencies. In February 2020, he said digital assets like Bitcoin (BTC) lack the basic tenants of a stable currency and praised the Securities and Exchange Commission for “cracking down” on initial coin offerings.

Kashkari is not a member of this year’s Federal Open Market Committee, the group responsible for setting United States monetary policy.

Reserve Bank of Minneapolis, Neel Kashkari, took a jab at Dogecoin (DOGE) concluding week by referring to the memecoin as a Ponzi scheme, upping his rhetoric against cryptocurrencies.

Kashkari’due south comments were in response to a LinkedIn poll by Paul Grewal, the chief legal officer and corporate secretarial assistant of Coinbase, who asked his connections nearly the proper way to pronounce “Doge.”

“The correct pronunciation is pon-zi,” Kashkari quipped.

This isn’t the first time Kashkari has taken aim at cryptocurrencies. In Feb 2020, he said digital assets similar Bitcoin (BTC) lack the bones tenants of a stable currency and praised the Securities and Exchange Committee for “cracking down” on initial coin offerings.

Kashkari is not a member of this year’due south Federal Open Market Commission, the group responsible for setting United States monetary policy.

Fed neel kashkari calls dogeat

Last Thursday (28 July) we learnt that the US is officially in a recession. But lots of talking heads want to tell us it’s not really a recession.
Meanwhile, stock markets are pumping as if this recession will force an imminent return to the ‘easy money’ low-rate policies that the Fed so recently abandoned.

The S&P 500 (US500) is up more than 5% from Tuesday’s low (at time of publication), while the Nasdaq (US100) has been even more impressive, gaining 7% over the same period. Just a strong bear market rally or a sign that times are changing, and sentiment is picking up?

S&P 500 (US500) stock index price chart

So what’s going on and what does it mean for traders?

There’s loads of noise, moving parts and disconnects among all this market mayhem, so let’s break things down to make sense of it all before getting carried away.

Fed neel kashkari calls dogecoin

The Minneapolis branch of the Fed will serve as an alternate FOMC member in 2022 before rotating back onto the committee as a voting member in 2023.

While Kashkari isn’t voting on monetary policy this year, he opposes any measures to hike interest rates before 2023. The Fed’s dot-plot summary of interest rate forecasts released last week suggested that policymakers are eyeing a resumption of rate hikes by the end of 2023, which is earlier than previously expected.

The revised forecast may have contributed to the sharp rise in the U.S.
dollar at the expense of equities, commodities and even cryptocurrencies. Digital asset values were down across the board on Sunday, extending a sharp correction from last week’s mild recovery.

Assets like DOGE burst onto the mainstream earlier this year in a retail-driven FOMO that was aided by favorable tweets from Tesla CEO Elon Musk.

Fed neel kashkari calls dogehin

Wages continue to grow. So far, the labor market is very, very strong.”

Don’t fight the Fed

“Don’t fight the Fed” is a timeless cliché passed down from older generations of traders and investors to the new breed. Perhaps that message has been lost after a decade plus of markets being spoiled by a central bank that’s quickly responded to slowdowns by cutting interest rates.
It’s a fascinating dynamic. Sir John Templeton famously said that the four most dangerous words in the English language are “it’s different this time”.

Market sentiment:

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73%27%

You voted bullish.

You voted bearish.

Give Oil – Brent a try

Even accepted wisdom needs context though.

The Fed’s dot-plot summary of interest rate forecasts released last week suggested that policymakers are eyeing a resumption of rate hikes by the end of 2023, which is earlier than previously expected.

Related:Bitcoin Price Eyeing $7,000 After Fed Says it Has ‘Infinite Cash’

The revised forecast may have contributed to the sharp rise in the U.S. dollar at the expense of equities, commodities and even cryptocurrencies. Digital asset values were down across the board on Sunday, extending a sharp correction from last week’s mild recovery.

Assets like DOGE burst onto the mainstream earlier this year in a retail-driven FOMO that was aided by favorable tweets from Tesla CEO Elon Musk.
The hype surrounding Dogecoin even eclipsed that of Bitcoin in January as tweet volumes surged 1,800%.

Emphasising the point further he added:

“The committee is united in our determination to get inflation back down to 2 percent, and I think we’re going to continue to do what we need to do until we are convinced that inflation is well on its way back down to 2 percent — and we are a long way away from that.”

And just in case anyone at the back wasn’t paying attention, Kashkari declared that the bar to clear for lower rates is “very, very high”

GME

AAPL

GOOG

TSLA

The Minneapolis Fed Chief appeared on ‘Face The Nation’ on Sunday night to reiterate his position:

“Whether we are technically in a recession or not doesn’t change my analysis, I’m focused on the inflation data. I’m focused on wage data. And so far, inflation continues to surprise us to the upside.

Nation.

“We are a long way away from achieving an economy that is back at 2% inflation. And that’s where we need to get to.”

Graeme Wheeler, who was governor of New Zealand’s central bank from 2012 to 2017, co-authored a paper published last week under the title “How Central Bank Mistakes After 2019 Led to Inflation.”

Wheeler and his co-author, economist Bryce Wilkinson, ticked off those mistakes: central banks were too confident about their monetary policy framework, too confident about their models, too confident they could control output and employment, lost their focus on price stability and took on too many other obligations, including conflicting “dual mandates” and the distraction of extraneous political objectives like climate change.

The Fed made every one of those mistakes and is now trying to catch up on inflation.

Within the next five years, inflation will return to the 2-3% range

Which is all well and good as long as they don’t change their minds.

Ahead of the June meeting, the preliminary results of the University of Michigan survey showed longer term inflation expectations accelerating to 3.3%. This is partly what prompted the Federal Reserve to hike by a larger than expected 75bps. The final reading was later revised down to 3.1%, while the latest survey saw expectations drop to 2.8%.

The Fed has already shown their hand once. If longer-term inflation expectations begin to tick higher again, it would be no surprise to see them increase the aggression and drive those expectations back down with even higher interest rates.

On Thursday, the Commerce Department confirmed that the economy contracted in the second quarter at an annualized 0.9% rate after declining at a 1.6% rate in the first quarter. We now have to call two successive quarters of decline a “technical” recession, because administration officials are not willing to use the R-word.

This roused the ire of bank expert Karen Petrou in her latest memorandum:

“It’s hard to think of a greater disconnect between economic policy and economic reality than when public officials assure Americans everything will be fine even as households with employed individuals are cutting back essential purchases, going even more deeply into debt, and hearing more and more about shorter hours and even layoffs.”

Another prominent Fed critic, economist Nouriel Roubini, weighed in last week with a gloomy forecast.

The central banker previously referred to cryptocurrencies as a “giant garbage dumpster.”

Federal Reserve Bank of Minneaopolis President Neel Kashkari took a jab at Dogecoin (DOGE) last week by referring to the meme coin as a ponzi, upping his rhetoric against cryptocurrencies.

Kashkari’s comments were in response to a LinkedIn poll by Paul Grewal, the chief legal officer and corporate secretary at Coinbase, asking his connections about the proper way to pronounce Doge.

“The right pronunciation is pon-zi,” Kashkari quipped.

This isn’t the first time Kashkari has taken aim at cryptocurrencies.

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