Wipe Out! $32 TRILLION In Stock Value Wiped Out (US Core Deflator Rises To 4.9% Prompting Taylor Rule Fed Target Rate Of 9.65%, We Are Currently At 3.25%)

by confoundedinterest17


$32 trillion of global stock value has been wiped out since December 2021.

Today’s core PCE deflator reading of 4.9% year-on-year shows that the rise in inflation is far from over. With a core PCE deflator of 4.9%, the Taylor Rule suggests the Fed funds target rate should be 9.65%, well below its current level of 3.25%. So if the Fed follows any kind of rule, rates should continue to rise.

And if we use headline inflation of 8.30% year-on-year, the Taylor rule suggests raising the target rate to 14.75%.

After yesterday’s dismal Q2 report of -0.6%, I fully expect a recession. Isn’t that a kick to the… head?

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