Reply To: Traders Market Weekly: The Fed’s Fight Against Inflation

#38264
Truman
Participant

Good analysis found:

The market has been chopping sideways in a narrow range for 6-7 days. At this point, I would assume that may continue into the CPI number on Friday. Patience is more important than ever for top-down/index traders right now.

Outside of equities, the yen continues to get slaughtered, and oil continues to look unstoppable.

How inflation isn’t sky high in Japan right now is one of the world’s great mysteries. Japan imports everything underlying its economy. It’s paying for all of that with a crashing currency. And everything has become much, much more expensive, even in dollar terms, to import when it comes to raw goods.

One piece of analysis I came across suggests that companies in Japan deal with squeezed margins from rising input costs by actually cutting worker wages rather than passing those costs through in the form of higher prices for end goods. But that can’t work forever, which suggests there could come a point where we see a qualitative shift and an abrupt pivot from the BoJ.