I’m puzzled by the talk of an imminent Fed pivot. If the credit market completely seizes the Fed would pivot. If the unemployment rate were to double to 6% the Fed would pivot. The Fed will not stop tightening because the equity markets are off for the year or because the housing market has slowed.

• The Fed remains highly accommodative when you consider the CPI in relation to the Fed Funds Rate. The Fed Funds Rate less the year-over-year change in CPI remains negative at near record levels.

• The chart below plots the year-over-year CPI versus the Fed Funds Rate.

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