Posted on 11/24/2021 11:10:16 AM PST by Red Badger
The committee that sets interest rates for the Federal Reserve released the minutes from the November meeting where it first signaled that it could be dialing back all the economic help it’s been providing during the pandemic.
Following the two-day session that concluded Nov. 3, the Federal Open Market Committee indicated it will begin cutting back on the monthly bond-buying program that had seen it purchasing at least $120 billion in Treasurys and mortgage-backed securities.
The goal of the program was to keep money flowing in those markets while maintaining broader interest rates at low levels to boost economic activity.
In its post-meeting statement, the FOMC said “substantial further progress” in the economy would allow a $15 billion a month reduction in purchases -- $10 billion in Treasurys and $5 billion in MBS. The statement said that pace would be maintained through at least December and probably continue going forward until the program wound down – likely by late spring or early summer 2022.
Investors, though, were awaiting the minutes for a deeper glimpse into what would prompt the Fed to move even more quickly in pulling back stimulus.
That’s important because inflation has gotten even hotter since the November meeting. In previous cycles, the Fed has raised interest rates to cool the economy, but officials have said they are willing to allow inflation to run hotter than normal to let the employment picture improve.
Markets, though, are anticipating a more aggressive Fed. Traders in contracts that bet on the future of short-term rates are indicating the Fed will raise its benchmark rate three times in 2022 in25 basis point intervals, though current official projections are for no more than one hike next year. However, those markets are volatile and can change quickly depending on the signals the Fed sends.
This is breaking news. Please check back here for updates.
Well that’ll sure help the economy. (/sarc
That’s how the system works.
Bring back 20% Home Mortgages . let’s see how the youngins react
We either headed for that or hyper inflation equal to the Weimer Republic.....
It's the most commonly used tool to fight inflation but it may not be effective in this case. I suspect that they will ease rates up to try and moderate the inflation rate and see if it helps.
Lowest jobless claims since 1969.
Ports of LA and LB see 33% decrease in container backlogs.
FED sees strength building in economy and may move up interest rate increases.
Housing market still strong almost everywhere.
Conservative perma-doomers hardest hit.
Raise interest rates when the nation is 30 trilling in debt. Yeah, time for another sack of rice.
Thing is: lots of credit card companies base their interest rates to you on what the interest rate the fed issues.
Thing is: lots of credit card companies base their interest rates to you on what the interest rate the fed issues.
land who is the biggest debtor? especially in short term financing?
yep, the govt.
You’ve got it completely backwards, congratulations.
Again, credit card rate escalation is part of that system. Congress and Biden will never suffer for the immense damage they have done to the economy and the well-being of millions of citizens.
Jimmy Carter II here we come. We can expect interest rates to hit 15% or higher.
Back in the 1950s I remember seeing in my textbook a pic of a German man with a wheelbarrow full of money which he was using to buy a loaf of bread. Never forgot that pic.
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Reading comments on FR posts dealing with finance has taught me more than anything else why most people don’t prosper financially.
Deflation. Except for The Exempt Ones
LOL! I have no idea what credit card base their rates on but it's certainly not the Fed rates. If they did all these come-ons I get on a daily basis would not be offering me cards at 16.99% or 26.99% or God knows what interest rate. They may use it as an excuse to jack their rates even higher but that's about it. It will impact mortgage rates though.
That makes no sense to except when the financial system is rigged and has no sound economic foundation underneath it.
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