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Fed Eyeing Potential for Faster Rate Increases to Ease Inflation
Officials also stepped up deliberations last month over how to shrink central bank’s $9 trillion asset portfolio, January minutes show

They agreed that “if inflation does not move down as they expect, it would be appropriate for the committee to remove policy accommodation at a faster pace than they currently anticipate,” said the minutes of the Jan. 25-26 meeting, which were released Wednesday.
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https://www.wsj.com/articles/fed-ey...ifqs5hoec9b&reflink=desktopwebshare_permalink
 
Powell Says Fed Is on Track to Raise Rates in Two Weeks
‘We will need to be nimble in responding to incoming data and the evolving outlook,’ says the Fed chairman

Federal Reserve Chairman Jerome Powell said it would be appropriate for the central bank to raise its benchmark interest rate at its meeting in two weeks amid high inflation, strong economic demand and a tight labor market.

Mr. Powell said it was too soon to tell how Russia’s invasion of Ukraine and the strict economic curbs imposed by the West against Moscow would influence the U.S. economy. But his overall remarks suggested growing urgency to tighten policy.
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https://www.wsj.com/articles/powell...ye3vwo6bcuu&reflink=desktopwebshare_permalink
 
Everybody should be programming in a nice big 0.5% rate hike in two weeks. It's almost a given that rates are going to climb over the whole summer.
 
Let's hope it is a positive interview and the market doesn't react negatively.

Ignore the "last edited by" I pressed a wrong button. oops.
 
Rate hikes WILL continue for at least another 1.5%to 2% from here. Inflation was stronger than expected and even now the interest rates are below what they’ve been for the last 50 years, except for the last year.

When home mortgages top 6%, then we can relook where inflation is, and decide what to do about rates. I really think at least the next two half-point rate hikes are a sure thing.


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Powell tells Congress the Fed is ‘strongly committed’ to bringing down inflation

Fed Chairman Jerome Powell said Wednesday that the central bank is “strongly committed” to bringing down inflation and can do so with its monetary policy tools.

That means higher interest rates until “compelling evidence” emerges that inflation is coming down.
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https://www.cnbc.com/2022/06/22/pow...gly-committed-to-bringing-inflation-down.html

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This may not be the best news for stocks. Yes, we all want to see inflation under control, but that means very tight money conditions from the Fed, and the stocks market is a fan of that type of environment.
 
The new headline from Powell's continued testimony to congress today is his use of the word unconditional when asked about the Fed's fight with inflation. This implies that the Fed has set their goal of price stability above other potential set backs including a consequential recession. But it seems that Powell believes a realistic implication of the Fed's monetary tightening will be a rise in unemployment which already sits at record lows. Powell also said he expects economic growth to pick up for the second half of 2022.

The doom and gloom surrounding the Fed's campaign against inflation reflects what the Fed thinks is a possible consequence but not necessarily a probable consequence.

Fed's Powell says commitment to curbing inflation is 'unconditional'
 
I wonder what the lag expectations are for raising rates and inflation data. Will last month's rate hike have an effect on June's PCE or CPI? Or does the cascade from higher borrowing costs to consumer prices take much longer?
 
The probability of rate hikes continuing into Dec 2022 are still high so it doesn't look like the are monitoring, but going full force.

Right now there's a 48% chance the Fed Funds rate will be 3.5% at that meeting December meeting, a 29% chance of 3.75%, and it is currently 1.75%
 
Are we in a recession? It doesn’t matter, Fed official says: ‘I’m focused on the inflation data’

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, told CBS’ “Face the Nation” that inflation poses a larger threat than a potential recession.“We’re going to do everything we can to avoid a recession, but we are committed to bringing inflation down, and we are going to do what we need to do,” Kashkari said.
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https://www.cnbc.com/2022/07/31/are...al-says-im-focused-on-the-inflation-data.html
 
Fed’s Bullard sees more interest rate hikes ahead and no U.S. recession

St. Louis Fed President James Bullard said he expects another 1.5 percentage points or so in interest rate increases this year.

“We’re not a recession right now. ... To some extent, a recession is in the eyes of the beholder,” he told CNBC.

Markets are pricing in another half percentage point rate hike from the Fed in September, though the chances of a third consecutive 0.75 percentage point move are rising.
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https://www.cnbc.com/2022/08/03/fed...est-rate-hikes-ahead-and-no-us-recession.html
 
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