To The Moon

The 2% inflation rate target is not arbitrary but rather a result of careful consideration and analysis by central banks and policymakers. It is based on economic theories and empirical evidence that suggest a moderate level of inflation can be beneficial for the economy. Here are a few reasons why the 2% inflation rate target is considered reasonable:

Price Stability: A low and stable inflation rate helps maintain price stability in the economy. It allows businesses and consumers to make informed decisions without the uncertainty caused by rapidly changing prices.

Economic Growth: A moderate level of inflation can stimulate economic growth by encouraging consumer spending and investment. It provides an incentive for individuals and businesses to spend and invest rather than hoard money.

Nominal Wage Adjustments: Inflation allows for nominal wage adjustments, which can help maintain the competitiveness of the labor market and ensure that wages keep up with the cost of living.

Central Bank Credibility: A clear and transparent inflation target helps central banks establish credibility and anchor inflation expectations. This allows them to effectively conduct monetary policy and maintain macroeconomic stability.

While the 2% inflation rate target is widely used, it is important to note that central banks have some flexibility in their approach. They may adjust their target based on economic conditions and other factors to ensure the stability and growth of the economy.

the pnf charts of $DJIA(.DJI)$  and$S&P 500(.SPX)$  show they are back up testing the resistance zone again. the us market is back to the bad news is good news cycle again. poor economic data and hot inflation data drives the stock prices up. this is also supported by news that uk is out of recession and the bank of England may cut rates in June. the ecb sees inflation retreating according to expectations and is also contemplating cutting rates to avoid falling behind the curve. 

spx may hit 6000 if it breaks above the resistance zone. this is just the beginning of the bull run. bull run can last for at least 4 to 10 years. institutions position their money in the market 6 months before the market moves. 

$US2Y(US2Y.BOND)$ retreated from 5% to 4.8% zone. 

do apply automatic investment system where you add shares at each 10% drop or at support zones if you know technical analysis. this way you conserve your capital while the stock is strongly downtrending. do take profit at 10% intervals or at resistance zones if you know technical analysis. this way you have capital to buy the dip. only applies to stocks in an index or warren buffett would approve. bon courage.

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