Situation is quite bad and may get worse.
How many market players got wrong footed is they look at commodity and oil price think it has fallen decided to BUY think inflation is over and Fed will soften. The reverse occurred.
There is a delay effect and reduce effect as the lower oil price transmit through the economy. The price increase was already circulating. So when oil price go down the effect may be delayed or not so great. For example the oil spike cased a logistic company to increase price of delivery. This case sellers of goods to raise price. When oil drop, the logistic company may not cut price immediately ...and may not do so.
But there is a side scenario that investors have not considered.
Remember in late 2021 Fed claimed that inflation was transitory and it was quite relax about tightening. It turner out they were wrong big time.
Then they swing all the way in opposite direction and inflation become No.1 enermy. These Fed hikes are no joke. They are sharpest biggest rise in ever.
It is possible the Fed itself does not understand the actual effect of such massive hikes...and these hikes has already cause some internal injury to YS economy. ..and within weeks we can be staring at deflation.
This is data from a live inflation tracking using big data analytics.
Inflation has disappeared and flatlined. General.prise has falling from peak 3 months ago.
Every 1% rate hike cost of debt servicing goes up US$600B.
The stock market sinking has caused wealth reduction of 3 Trillion
The inflation problem is already over.
The problem now is recession and price deflation
The Fed is off sync wrong again!
![[Image: QYajSps.jpg]](https://i.imgur.com/QYajSps.jpg)
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