To bring inflation down, the central bankers at the U.S. Federal Reserve need you to lose money, whether it's in stocks or crypto. It's a dangerous game. HeleneBraunn reports.
per month. That’s great news for job seekers but, perversely, something that could fuel inflation, raising pressure on the Fed to take even stronger action.That spells potential trouble for markets like stocks and crypto.
“The Fed wants to create a reverse wealth effect and get people that own assets to rethink some of their purchase habits and maybe slow demand,” said Jim Bianco, president of Bianco Research. “It’s a dangerous game,” he added. “You want the market to go down, but you gotta be careful when that starts to happen because if you get everybody running for the hills because they’re going to be the enemy of the market, you could turn it into a rout.”, the economy seems to be in good enough shape to withstand continued aggressive rate hikes. Further signs of weakness, though, will test the Fed’s resolve and force policy makers to evaluate how much pain they want to cause in markets.
“It's very possible that [the central bankers] could very well cave once they're faced with some really bad employment numbers, but they haven't been so far,” Bianco said. “I don’t think they will but I completely understand that argument.”
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