Fed sees faster time frame for rate hikes as inflation rises

The Associated Press ^ | June 16, 2021 | By CHRISTOPHER RUGABER

[Oldeconomybuyer]

WASHINGTON (AP) — The Federal Reserve signaled Wednesday that it may act sooner than previously planned to start dialing back the low-interest rate policies that have helped fuel a swift rebound from the pandemic recession but have also coincided with rising inflation.

The Fed’s policymakers forecast that they would raise their benchmark short-term rate, which influences many consumer and business loans, twice by late 2023. They had previously estimated that no rate hike would occur before 2024.

In a statement after its latest policy meeting, the Fed also said it expects the pandemic to have a diminishing effect on the economy as vaccinations increase, thereby allowing for more growth.

The central bank raised its forecast for inflation to 3.4% by the end of this year, from 2.4% in its previous projection in March. Yet the officials foresee price increases remaining tame in the following two years. That outlook reflects Chair Jerome Powell’s view that the current inflation spikes stem mainly from supply shortages and other temporary effects of the economy’s swift reopening from the pandemic.

[Oldeconomybuyer]

Bidenomics.

[Army Air Corps]

“Thanks, Joe!”

[cgbg]

The economy is addicted to low interest rates.

If the Fed raises them at all significantly the crash will be epic.

Think of it as surfing during a tsunami—the slightest move and disaster strikes.

[cuban leaf]

Borrow all the money you can now on a low fixed rate and as long term as possible. Then just pay it off with inflated dollars. It’s like giving yourself a raise, and sometimes a BIG raise.

[EEGator]

This will be an interesting couple years…

[spokeshave]

Carter stagflation on steroids.

[BipolarBob]

Bidenflation.

[srmanuel]

Remember when the prime lending rate was like 20% and unemployment was nearly 10%.....oh the good old days of Democratic Liberalism...they do get equity when they govern, all but the super rich get screwed equally.

[Nateman]

...Yet the officials foresee price increases remaining tame in the following two years

Shameless liar. They know damn well they inflated the currency and what is coming down the road.

[cgbg]

Borrow all the money you can now on a low fixed rate and as long term as possible. Then just pay it off with inflated dollars.

This is one reason the housing markets are going crazy right now. Buyers are following this strategy--and the mortgage lenders are gonna fail _again_, and then get bailed out by the feds _again_.

[catnipman]

“coincided with rising inflation”

instead of:

“causing rising inflation”

typical fascist leftist propaganda from AP ...

[ConservativeInPA]

How about stop printing money?

[glorgau]

> Borrow all the money you can now on a low fixed rate and as long term as possible.

Hmmm, might get a VA loan on a property. By the time it’s paid off it might be worth what people are asking these days.

[MagUSNRET]

Either Powell doesnt believe a word he is saying, or he is truly a babbling idiot that doesnt know what he is doing. He sounds horrible in this alleged news conference!

[rlmorel]

So, subtle...oh, so subtle...

Those a-holes try so hard to be clever.

[Dr. Sivana]

Borrow all the money you can now on a low fixed rate and as long term as possible.

Getting ready to close on a house next month, largely for that reason. The price was high, but rentals are high too. Interest rates are the last piece of the stagflation puzzle.

[cuban leaf]

Think about it this way: You’ve heard all those stories about needing a wheelbarrow of money to buy a loaf of bread in Weimer Germany? Well, at that time if you had a loan on a house taken out BEFORE the inflation hit, that wheelbarrow of money would pay off your mortgage.

Or you could buy a loaf of bread. :)

[Uncle Miltie]

Run rate inflation CPI / PPI Blend is at 8.4%.

Case Schiller home price index is >13%.

And they’re talking aboit 2023?

Nuts. This is not grandpa’s data feedback loop of several years. This is a millisecond economy that will totally overheat next month.

We’re doomed by ancient slugs at the Fed.

[PeterPrinciple]

Borrow all the money you can now on a low fixed rate and as long term as possible. Then just pay it off with inflated dollars.

---

You have no guarantee that you will have those inflated dollars. What does history teach us?

[Uncle Miltie]

“How about stop printing money?”

You’re on the Domestic Extremist list now!