News & Feeds September 18, 2022

The US dollar’s strength is telling Powell to chill

As I’ve pointed out in previous posts, however, the Fed and the market are ignoring some very obvious signs which strongly suggest that the Fed’s best course of action is to NOT follow this script: 1) the dollar is extremely strong, 2) commodity prices are falling, 3) the M2 money supply has not grown at all for the past 6 months because the federal government is no longer sending Covid stimulus checks to the public, 4) measured inflation is already declining, and 5) inflation expectations have declined significantly, down 120 bps since early March (inflation expectations peaked at 3.69% and are now 2.49%). Moreover