What’s It Going To Be? Rate Cuts Or Rate Increases (Horrible Jobs Market While Moderating Inflation And Increasing Bank Credit Growth, 30Y Mortgage Rate UP 156% Under Biden)

Confounded Interest ^ | 03/30/2024 | Anthony B. Sanders

[Kaiser8408a]

Jerome Powell and The Federal Reserve have to make a decision about tightening monetary policy or loosening it. It’s a Presidential election year and The Fed will probably do what is necessary to support The Biden Administration’s re-election. But let’s look at the various conflicting economic indicators that are causing confusion at The Fed.

First, the Federal Reserve’s preferred gauge of inflation wasn’t hotter than expected in February, which could keep a mid year interest rate cut on the table.

The year-over-year change in the so-called “core” Personal Consumption Expenditures index — which excludes volatile food and energy prices — clocked in at 2.8% for the month of February.

That was in line with economist expectations and down from 2.9% in January. Core prices rose 0.3% from January to February, which was also in line with expectations and down from 0.5% in the previous month.

“There is no rush to cut the policy rate,” Waller said in a speech in New York.

Second, Bank credit growth is finally back in positive territory even though the 10Y-2Y yield curve slope remains negative. So this is a mixed signal.

Third, there is the terrible jobs reports where all jobs created in the US were part-time and full-time jobs declined. Hardly a positive sign for the economy.

Fourth, on the housing front, the 30-year mortgage rate is up 156% under Biden’s Reign of Error. Rate cuts would be helpful for reducing mortgage rates.

Finally, we have Citi’s economic surprise index (blue line) which is positive at 30.70 despite The Fed already having raised their target to the highest level since 2000 before the Iraq War/9-11 recession.

So, what’s it going to be? Rate cuts, rate hikes or hold still??

Hey, at least Joe isn’t eating ice cream while driving his gas-guzzling Chevy Corvette.

[Paladin2]

Congress has approved the Fed objective of “Re-elect BiXiden”?

[DIRTYSECRET]

If the SHTF in Octoberwill Trump get us out of it? It would be awesome. My Blackrock money was moved to a guaranteed 5% fund for 3 years.

[PGalt]

What’s it going to be? More SPENDFLATION from the mini kings and queens in CONgress.

“For imposing Taxes on us without our consent.” - Declaration

The SPENDING of our TIME-OF-LIFE taxed money, taxed gas, taxed etc., ec., etc.

[Daveinyork]

With a $34 trillion federal debt, the Fed’s choices are all bad.

[ClearCase_guy]

bfl

[noiseman]

The fed reserve finally painted themselves into an inescapable corner. Keep interest rates where they are, and the economy and the stock market stagnate. Lower them, and inflation flares up again. Pick your poison.

[Blennos]

My prediction. The Fed actually cares little about the US economy. Or inflation. Their main concern is the election of democrats. Rates will therefore be cut. This nation is doomed to hyperinflation. Put some money into real stuff: gold, commodities, real estate etc.