Fed's Mester still expects rate cuts this year, but rules out May

[NewsFeeder]

Fed's Mester still expects rate cuts this year, but rules out May

The central bank official noted progress made on inflation while the economy has continued to grow.

More @ CNBC...

 

[Boghie]

A lot of hymin' and hawin' by these FED board members...

The dummy who wrote the headline didn't read the article, and another dummy stated that the long term norm for the FED Funds rate is 2.5%.

The gist is:

1. If inflation glides smoothly to 2.0 - 2.5% then the FED will muck around with the Funds rate to stabilize at that mark if, and only if, they think their current rate will depress inflation further. Deflation truly sucks.
2. If inflation dumps into actual recession or deflation then the FED will drop the Funds rate. They now have the space to do so. They will not give up that space because politicians like to borrow and spend money.
3. And, if inflation reestablishes itself they will hold or raise the rate.

Simple.

And, they will simply hold. Because of that, keep an eye on the 'F Fund'. When it stops bouncing around (that is, when the speculators realize that the FED doesn't give a damn about saving the Federal Gubmint from their impending doom) then look at positioning in the 'F Fund'. Till then, it is a lousy investment - neither stable nor safe.

GLHF