Mea Culpa

 

Inflation has begun to consistently exceed central bank targets, prompting increased speculation that central banks could be forced to tighten monetary policy earlier than expected. Investors have been trying to ascertain where and how the Fed might look to tackle inflation if it concedes that rising prices are stickier than expected.

 Powell's comments amounted to a "Mea culpa," or an admission that he was wrong, and that the potential effect it could have on Fed policy and the value of assets might be underappreciated.

"In effect, the reality is no asset will benefit from the cost of capital rising, and you can kind of see the same thing going on in certain U.S. equities." 

"Most equities have been punished the last couple of days, and we can talk about the Omicron [Covid variant], but it's people somewhat fearful of the Fed's pivot to being wrong."

Inflation is a vicious beast, if you ignore it or attempt to control it.    Just a thought.