QS - The Fed Feels The Inflation 'Heat' But Likely Won't Taper Before Year's End
- Senator Joe Manchin (D-WV) is “deeply concerned” about the Fed’s easy money policy and urged the Fed to curtail its aggressive intervention in the bond market. This raises questions about whether or not the Fed might taper sooner than expected.
- I believe the Fed will not address tapering until its December FOMC meeting, since Fed Chairman Powell is up for renewal in early 2022 and the Biden Administration is still proposing spending trillions more dollars in the wake of its $1 trillion bipartisan infrastructure bill.
- As for inflation, the Labor Department announced last Wednesday that its Consumer Price Index (CPI) rose 0.5% in July and has now risen 5.4% in the past 12 months, reaching the highest annual rate in 13 years. The next day, the department announced that its Producer Price Index (PPI) surged by a full 1% in July (vs. June).
- There are some big developments brewing on the EV front. Interestingly, the high price of nickel and cobalt has apparently convinced Apple to go with iron phosphate batteries, which are currently made by CATL in China.
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The Fed Feels The Inflation 'Heat' But Likely Won't Taper Before Year's End