The Federal Reserve under Jerome Powell has attracted widespread criticism for first being late in responding to a rise in inflation and then for its tackling it with almost unprecedented aggression in the history of the central bank.
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Tesla CEO Elon Musk responded to a tweet by Wall Street Silver that showed a chart showing the fastest response of the central bank to inflation. To a tweet that said “Soft landing is not really gonna be an option,” Musk responded by saying, “Wow, worse than ‘99 …”
Wow, worse than ‘99 …
— Elon Musk (@elonmusk) December 20, 2022
Interestingly, the chart displayed the changes in the Federal Funds target rate with respect to time in past tightening cycles. It showed that in the current tightening cycle, the curve has been much steeper as compared to the past and it took less than 10 months for the Fed Funds target rate to cross the 4% barrier, which in 2004 took more than 22 months.
Major Wall Street indices closed in the red on Monday for the fourth consecutive session as investor optimism on the much anticipated "Santa Claus" rally began to fade over fears of recession gaining momentum. The SPDR S&P 500 ETF Trust SPY closed 0.85% lower while the Vanguard Total Bond Market Index Fund ETF BND shed 0.6%.
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