Posted on 01/05/2023 5:03:00 AM PST by MtnClimber
Don't kid yourself -- the minutes yesterday made clear The Fed will not be cutting rates in the back half of 2023, and in fact likely won't be done raising them. It does not matter if you like it or not. In fact I do not expect any material change in their outlook until after September 30th of this year, and then it will be six months to a year before inflation can back off.
Why?
Omnibus.
Simply put Powell sees that rising labor costs are driving the bus now, which is the second impulse and wage-push inflation is very hard to knock down. Congress did this with the Russian Sanctions plus the continued deficit spending which is now locked in through September as a result of what Congress did in the last days of 2022.
That was stupid on the part of Congress but they did it and they can't take it back because to repeal that you'd need the House, Senate and Biden's signature to do so and you won't get either the Senate or Biden. So we're stuck with it through the end of the fiscal year which is September 30th.
Everyone is trying to evade this fact, but you can't and The Fed knows it.
The market is trying to browbeat The Fed on this...
(Excerpt) Read more at market-ticker.org ...
The democRATs passed the Omnibus bill. The Republicans in the Senate could have blocked it, but there are too many RINO swamp creatures.
“and then it will be six months to a year before inflation can back off.”
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Why will it back off? Raising rates without cutting spending?
“but there are too many RINO swamp creatures.”
__________________________________
Hear, hear! And, They’re fighting feverishly for a swamp creature to be Speaker of the House.
The Omnibus spending was ok and won’t be inflationary because some swamp creature said these programs already exist.
I think the analysis underestimates the amount of money that has disappeared and will disappear with the stock market drop, crypto drop, economic isolation, housing reversal etc... The spending can’t counteract that. I think once we feel the effects of the recession the FED will call victory and start lowering rates until we hit hyper inflation. I’m not sure how they will “market” the reversal but they will reverse because Wall Street wants it bad. You can see all the usual suspects asking for a rate reversal already. Maybe like Congress call it “Inflation Fighting Rate Reduction Plan.” It’s all in the name apparently.
I love it! Bring on higher rates! No debt and I’m making a killing on no risk CD’s!
Let the slugs who fed at the no interest trough feel some pain now.
What happened to the Inflation Reduction Act? Author missed it too. That (lie) was supposed to fix (make worse) the current wave of inflation, right? Trojan horse FJB told us, we have just got to unify and believe him.
And so now the big money has to fight (blame) inflation as caused by wage earners (workers). Keep importing millions of illegals, that will help depress wages making the working middle class even smaller.
Both business and givernment need lower interest rates. They were both were addicted to artificial near 0% rates for a long time. Customers are drying up or have not returned after the shamdemic. A lot of small businesses were closed and never to open again.
One thing is for sure, when times are good, the givernment spends more money. When times are bad, givernment spends more money. When things are really bad, givernment spends even more money. They are not immune from the laws of economics. They just don’t suffer the consequences - they offload it onto the masses.
And "normal" seems to be at least $1 Trillion in current budget deficits, plus another Trillion or so each year that is "off budget". Kind of like eating a chocolate cake and not listing it on your list of food you have been eating while on a diet.
Can't seem to find any verification of this in the media. Too many numbers with dollar signs confuses the media.
No way are your CD rates keeping up with inflation so you are losing money. Only creditors make out during high inflation.
Don’t care. Making enough on interest combined with savings from working 40 plus years to live the lifestyle I like until my demise.
I don’t like inflation but I can roll with it. It’s the younger people with limited resources, and those that live paycheck to paycheck that are really feeling the pain.
I love this: “One thing is for sure, when times are good, the givernment spends more money. When times are bad, givernment spends more money. When things are really bad, givernment spends even more money.” And the Republicans act like holdup victims as they count their personal fortunes like Liz Cheney going from 10 to 44 million in fortune on a government salary.
“The democRATs passed the Omnibus bill.”
You’re letting McConnell and his crew off way too easy. He could have blocked this thing. But he didn’t. He intentionally dropped this turd on the new Republican house knowing he’d cut their nut sacks off.
He’s worse than useless. He’s complicit.
L
Did we honestly expect anything less?? The Uniparty reigns supreme...
Where are you getting CD's that offer more than the inflation rate? Because if you are getting less than inflation rate you are losing value and cheering about it. I'm old enough to remember when CD's actually paid a few points ABOVE the inflation rate so you actually earned a little on them in real terms.
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