{"id":17784,"date":"2021-05-14T07:30:43","date_gmt":"2021-05-14T05:30:43","guid":{"rendered":"https:\/\/bernstein-bank.com\/?p=17784\/"},"modified":"2021-05-14T07:35:02","modified_gmt":"2021-05-14T05:35:02","slug":"is-anyone-else-believing-the-head-of-the-fed","status":"publish","type":"post","link":"https:\/\/bernstein-bank.com\/en\/is-anyone-else-believing-the-head-of-the-fed\/","title":{"rendered":"Is anyone else believing the head of the Fed?"},"content":{"rendered":"\n\n\n
\n

Gold<\/span>\u00a0 1823,145
\n(-0,17%<\/span>)<\/h4>\n<\/th>\n

\n

EURUSD<\/span>\u00a0 \u00a01,2086
\n(+0,04%<\/span>)<\/h4>\n<\/th>\n

\n

DJIA<\/span>\u00a0 34095,50
\n(+2,57%<\/span>)<\/h4>\n<\/th>\n

\n

OIL.WTI<\/span>\u00a0 63,815
\n(+4,43%<\/span>)<\/h4>\n<\/th>\n

\n

DAX<\/span>\u00a0 \u00a015238
\n(+0,38%<\/span>)<\/h4>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n

The US consumer price level (inflation) rose by 4.2% year-on-year in April. Analysts were expecting a rate of 3.6%. Such an increase has not been seen in America for more than 20 years. Naturally, the dollar began to rise immediately, and all risky assets sold off.<\/p>\n


\nS&P 500<\/strong><\/p>\n

\"S&P<\/p>\n

Does Fed chief Jerome Powell think everything is under control?
\nWhat 2% annual inflation can we talk about when the Bloomberg Commodity Index of 23 commodities has risen by half in the last 7 months? The argument that rising commodity costs will have no effect on rising goods costs is a 5th grade schoolboy’s argument.
\nThat said, the Fed has 2 main objectives. They are to ensure minimum unemployment and to keep inflation no higher than 2%. Both objectives have completely failed. The unemployment rate remains above 6% and inflation is already more than double the target.
\nWhat should the Fed do to stop the depreciation of the US dollar? Of course, raise interest rates and stop printing money out of control. Instead we hear assurances from the head of the Fed that everything is under control.
\nHowever, everything that Jerome Powell will say is known in advance. And it really is a mockery of common sense. Then why does the head of the Fed keep doing it? And why does the American elite, gritting their teeth, support him?
\nThe answer is that the Fed is trapped. It has no good moves left. Anything it doesn’t do will be a bad decision.
\nSuppose the Fed raises the rate to 4% tomorrow. The outcome would be the following:
\n– A stock market crash and the ruin of many companies kept afloat by cheap money alone.
\n– Rising unemployment. Yes, a rise above the 6% mark.
\n– And worst of all. The US debt is $40 trillion. At 4%, it would need to spend $1.2 trillion annually just to service the debt.
\nHow did America get to this point?<\/p>\n

14.30 US retail sales in April
\n16.00 US University of Michigan Consumer Confidence Index for May<\/p>\n

\n

Important Notes on This Publication: <\/small><\/p>\n

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

Gold\u00a0 1823,145 (-0,17%) EURUSD\u00a0 \u00a01,2086 (+0,04%) DJIA\u00a0 34095,50 (+2,57%) OIL.WTI\u00a0 63,815 (+4,43%) DAX\u00a0 \u00a015238 (+0,38%) The US consumer price level (inflation) rose by 4.2% year-on-year in April. Analysts were expecting…<\/p>\n","protected":false},"author":37,"featured_media":17595,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[6],"tags":[],"class_list":["post-17784","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nIs anyone else believing the head of the Fed? | Bernstein Bank<\/title>\n<meta name=\"description\" content=\"The US consumer price level (inflation) rose by 4.2% year-on-year in April. 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