The Fed Created the Largest Pot of Boiling Water in History

Ah, what could have been, Jay Powell.

You could have ripped the bandaid off of this whole mess back in 2021, even 2022, by ramping up QT and dumping The Fed's toxic (about $2.6 trillion worth) mortgage-backed securities onto the market, coupled with inter-meeting surprise rate hikes, and tougher talk about inflation than the lawyer (and I am a licensed attorney, myself) double-speak.

But we are where we are. 

And The Fed's mess will only get messier, as the market seems to be finally, albeit slowly, realizing the comfortable, "hey, it's not so bad!" warm water is beginning to boil--Milton Friedman's analogy of inflation to alcoholism in the clip, below, seems apropos. 

This morning, we have AAPL NVDA TSLA and small caps leading lower. However, the likes of META and some other tech/growth names are trying to sustain rotation to keep things relatively benign on the market selloff. 

Either way, we are building towards next week's CPI, then the FOMC the week after, which means inflation remains front and center for the market as well as the eighteen month lag effect on the economy from the first rate hike back in March 2022.