Meaning in History: https://meaninginhistory.substack.com/p/briefly-noted-speaker-fed-notes-ukraine
Now, as readers will know, I believe Tom Luongo is on to something very deep with his Theory of Everything—which is, briefly, that the Fed is engaged in a war with the ruling globalist elite of the collective West—”Davos”—fronted by the World Economic Forum. It’s not a question of whether the Fed and its backers (the big NY commercial banks led by JPMorgan Chase) are on our side in all important matters, but they are opposed to the Great Reset as they see it developing. McConnell’s move makes best sense as part of the Globalist effort to force the Fed to knuckle under—the interest rate rises, if maintained in the face of the Omnibus bill, threaten economic catastrophe for the US. The Omnibus bill is, among other things, a move to force the Fed to back down and return to QE, along with the EU. Thus, Luongo tweeted this today:
I’d like to add Karl Denninger’s voice to this mix. He’s not into geopolitics, but he has consistently insisted that the Fed will not “pivot”. Since his post today was uncharacteristically brief, but joins several major themes—Sanctions, the Fed, and the Omnibus (the reference to September 30), I want to quote it in full:
Don’t kid yourself — the minutes yesterday made clear The Fed will not be cutting rates in the back half of 2023, and in fact likely won’t be done raising them. It does not matter if you like it or not. In fact I do not expect any material change in their outlook until after September 30th of this year, and then it will be six months to a year before inflation can back off.
Simply put Powell sees that rising labor costs are driving the bus now, which is the second impulse and wage-push inflation is very hard to knock down. Congress did this with the Russian Sanctions plus the continued deficit spending which is now locked in through September as a result of what Congress did in the last days of 2022.
That was stupid on the part of Congress but they did it and they can’t take it back because to repeal that you’d need the House, Senate and Biden’s signature to do so and you won’t get either the Senate or Biden. So we’re stuck with it through the end of the fiscal year which is September 30th.
This is McConnell’s Great Betrayal. This is why “the market is trying to browbeat the Fed”, it’s part of the plan to force the Fed to back down:
Everyone is trying to evade this fact, but you can’t and The Fed knows it.
The market is trying to browbeat The Fed on this, particularly on the longer end of the curve. They’ve got it wrong here folks; even a release of the Russian sanctions, which are highly unlikely, won’t restore the trade sequestration those sanctions destroyed. The Omnibus can’t be reversed as there’s no political path to do so.
If you’re bullish on anything but rates IMHO you’re due for a serious problem in your account balance.
Luongo and KD are in agreement on this. Yes, Powell went along with QE in order to get himself reelected, but it’s a different ball game now. And this is the game to be watching. More than ever, it’s all related.