Hi Readers
So we had the Fed announcement and they raised 50bsp. So the Fed is keeping it words and the reason is why?
The (PCI Public Confidence Index) which the Fed has stated on a number of times during there Q&A session, is there forward indicator.
While inflation went down and the market took it as that's it for rate moves , the PCI went up.
So what means is that inflation is going higher next month and the month after.
As traders you need to understand that the market is now run by algorithm's, there are thousand's of them some work on numbers while others work on headline words. Journalists know this and make the headlines which will propel the market higher 95% of the time. Why have a buy-est view? because it's about viewers and ratings.
So now that you understand the game your in you need to understand what comes out isn't what is. you need to make an effort to read and understand whats going on, unless you are a fundamental stock trader and not worried about small percentage moves.
All the bullshit that your being told about any central bank pivoting or cutting rates is a lie.
The best case scenario's is inflation will take 18 months from it halves from current, and thats not 2%.
The slower the central banks move on rates the longer rates will stay high. I say this because the world economy is so interlinked now that it's all affected. Example, Europe to longer to start raising rates, and as a result they current have a 10.1% inflation rate (15.9%), as we said rates need to be above the rate of inflation for at least 6 months.
Here in Australia we see every excuse under the sun to not raise rates by the RBA. Yes its trying to be compassionate, keep believing that and the nation will suffer for it. Simply put it the RBA is fully aware that people are eating through there savings and are unable to afford there repayments. If they moved as the should on rates the amount of defaults in the property market would have collapsed it by now.
So the approach is to hope that employers pay out wage rises to protect the commercial banks from defaulting loans. This is how dumb people are, 88% of mortgages from 2018-october2022 in Australia paid mortgages insurance as they didn't have the 20% equity to take loans out. So the banks are meant to be covered with the insurance yet I guess there not.
Yes people another Australian Banking Scam.
Similar with the other banking scam on rates, in the US you can take out a loan at the current rate at the time and it stays for the life of the loan. Where as in Australia previous loans written at lower rates go up regardless if the central bank raises rates.
This is why I urge those of you who have children to teach them about money, and to look to use banks not be dependent on banks.