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They seem to be on a mission to kill the economy and stock market.


Fed Governor Lael Brainard sees high rates ahead even with progress on inflation

Brainard insisted that the Fed won’t waiver in its commitment to taming prices that have come down some in recent months, but remain near four-decade highs.
Markets are assigning a near-100% probability that the FOMC will a raise its benchmark interest rate another quarter percentage point on Feb. 1.


“We are determined to stay the course,” Brainard said, using a phrase other Fed officials have echoed recently.
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https://www.cnbc.com/2023/01/19/fed...es-ahead-even-with-progress-on-inflation.html
 
The Federal Reserve is expected to raise rates by 0.25% today, and will likely continue with future rate hikes in order to shrink inflation to their 2% target, but at what cost? Reputable economists have warned that the Fed has misconceptualized the cause and solution to The United States' high inflation. They argue that the rate increases by the Fed solely shrink demand and harm the U.S. economy when the actual cause of high inflation comes from supply shocks and shifts in demand, not increasing demand. The minimal impact raising rates will have on inflation will be coupled with unnecessary declines in unemployment and hurt the economy.

These economists think the Fed should stop raising rates and take a different approach to the inflation problem. But borrowing costs are the Fed's most powerful tool to manipulate the economy, and they have grown determined to reach their 2% inflation goals and even worry that the recent drop in inflation could be transitory (a word we've heard before) if the Fed ends its rate hikes.

Today we will get a chance during the post FOMC decision press conference at 2:30 PM ET to see if the Fed has taken these worries into consideration or if they are adamant on their current trajectory to potentially raise rates by another 1% through 2023.


Most of this information came from a short Wall Street Journal Video.
 
TommyIV said:
Today we will get a chance during the post FOMC decision press conference at 2:30 PM ET to see if the Fed has taken these worries into consideration or if they are adamant on their current trajectory to potentially raise rates by another 1% through 2023.
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In today's press conference, Jerome Powell said the committee did not discuss pausing rate hikes for now and mentioned that the lower inflation data could very well be transitory. He said the committee will update their projections in the March FOMC meeting.

Jerome Powell also took the stance there is still a path to 2% inflation without significant economic decline and significant unemployment.

The S&P 500 spiked to nearly 1% gains following the FOMC meeting.
 
One of this week's main events starts tomorrow. Jerome Powell will testify in front of Congress and make his case for the FOMC's path to lower inflation. This may be a chance for investors to clarify what the latest economic data means to the Fed and their likely move in the following March meeting.

The second main event comes Friday. The February jobs report will be released, and it is a follow up to the January report that held concerning numbers for those worried about a too hot of an economy. We can imagine the Federal Reserve will also be watching closely with the investors.


Fed Chair Powell's testimony this week
 
Powell says rates are headed higher than expected

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in remarks prepared for two appearances this week on Capitol Hill. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
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https://www.cnbc.com/2023/03/06/stock-market-today-live-updates.html
 
Today we got a quick flip on projections for March FOMC meeting. The probability of the Fed not raising rates in the next FOMC meeting went from 0% to now 28% in one day.

On the flip side, the probability of the Fed raising rates by 0.50% in the next FOMC meeting went from 40% to 0% in one day.

Fed Rate Hike Probabilities

This of course has all to do with the collapse of Silicon Valley Bank and the Fed's actions to prevent further damage and contain the problem.
 
Fed's Kashkari says stress in banking sector brings the U.S. closer to recession

Recent banking turmoil could bring the U.S. closer to a recession, Minneapolis Fed President Neel Kashkari said in an interview with CBS’ “Face The Nation.”

“What’s unclear for us is how much of these banking stresses are leading to a widespread credit crunch. And then that credit crunch, just as you said, would then slow down the economy,” Minneapolis Fed President Neel Kashkari said in an interview with CBS’ Face The Nation.
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https://www.cnbc.com/2023/03/27/fed-kashkari-bank-stress-brings-us-closer-to-recession.html
 
Fed’s Bostic casts doubt on rate cuts this year even if there’s a recession

Atlanta Fed President Raphael Bostic said Monday that he doesn’t foresee rate cuts at least through 2023, even if a widely forecast recession hits.
“If there’s going to be a bias to action, for me it would be a bias to increase a little further as opposed to cut,” he told CNBC.

Chicago Fed President Austan Goolsbee also spoke to CNBC, saying he is taking a cautious approach to policymaking.
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https://www.cnbc.com/2023/05/15/fed...uts-this-year-even-if-theres-a-recession.html
 
nasa1974 said:
Good news I hope. Now we have to focus on the debt ceiling. :angryfire:
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The actual debt ceiling is like the actual minimum wage - but in reverse:laugh:

That is, the politicians can play around with whatever numbers they want, but the debt ceiling will be the point at which investors elect to look elsewhere when they want to invest safely. Those investors are individuals, corporations, and countries. We do not know where the actual debt ceiling is - but it does appear we want to find it:eek:
 
Dallas Fed President Logan says current data doesn’t justify pausing rate hikes yet

Dallas Fed President Lorie Logan said Thursday that the data points so far don’t justify skipping a rate hike in June.

“The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren’t there yet,” she said in prepared remarks for a speech.

Fed Governor Philip Jefferson also said inflation is too high, but he’s watching to see the impact that the rate hikes will have on the economy before deciding on future moves.
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https://www.cnbc.com/2023/05/18/dal...ta-doesnt-justify-pausing-rate-hikes-yet.html
 
Fed Minutes released from the previous Federal Open Markets Committees meeting in early May.

FOMC members held mixed opinions on where monetary policy should move next. Some want rates to pause going forward while others want to keep further rate hikes on the table if warranted.

Fed Officials Were Divided Over June Rate Pause
 
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Fed holds off on rate hike, but says two more are coming later this year

“Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy,” the post-meeting statement said. The Fed next meets July 25-26.
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https://www.cnbc.com/2023/06/14/fed-rate-decision-june-2023.html



Here’s what changed in the new Fed statement

https://www.cnbc.com/2023/06/14/heres-what-changed-in-the-new-fed-statement.html
 
I like this move. It gives banks and businesses time to digest those previous rate hikes, and still leaves the cards on the table for next time. Markets will like that.


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