- Markets are reacting poorly to the expectation that"inflation is here to stay," said John Feneck, Founder of Feneck Consulting. The Bureau of Labor Statistics on Tuesday reported that year-on-year inflation was 8.3 percent in August, higher than the 8.1 percent that markets priced in.
Feneck's remarks come amid the market's largest single-day drawdown since June of 2020. On Tuesday, the S&P 500 dropped by 4.3 percent, the NASDAQ was down 5.1 percent, Bitcoin was down 9 percent, and gold fell by 1.5 percent. The Fed's target for headline inflation is 2 percent, but Feneck said that"The Fed is in some sort of dreamland to think that 2 to 4 percent [inflation] is even achievable." He added that the Fed would require"a lot more hawkish behavior," which would "hurt the broad market," in order to tame inflation."Powell can't [bring inflation down] all by himself," Feneck said."He needs assistance.
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