You have to love it when the market gets excited about inflation dropping a couple tenths of a percent and goes on a buying spree effectively wiping out that couple tenths of a percent.
That is pretty ironic.
Is this expression also true? "the cure for high prices........is high prices!"
High prices is inflation. When they get high, it kills demand and the law of supply/demand kicks in and results in lower prices.
So the reaction today sort of sabotages that before it can have a big affect.
And the stock market is a psycholology thing with peoples emotions and expectations dominating.......dictated by news.
News today was bullish.
An example of high prices being the cure for high prices was the 2008 bubble(June 2008 featured crude getting almost to $150 before stifling demand and crashing lower-from other factors too).
Revisiting the 2022 vs 2008 commodity price comparison. Prices are below June 1 levels but have avoided a 2008-style late-year downside acceleration.#Corn, for example, was trading 45% below June averages by early Nov 2008. This year, corn has fallen about 9% since June.
I saw her post earlier today. 2008 showed a definite downward trend. Prices right now seem pretty steady…as in steady high.