Posted on 07/26/2022 5:35:03 PM PDT by george76
Chairman Jerome Powell may start offering less guidance about coming rate increases..
Evidence is growing that the Federal Reserve has fallen well behind on inflation and needs to make up for lost time. WSJ’s Dion Rabouin explains how we got here and what the Fed is doing to catch up.
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After the Federal Reserve lifts its benchmark interest rate on Wednesday, attention will turn to what Chairman Jerome Powell says about a rate increase at the central bank’s meeting in September.
The Fed is likely to raise its federal-funds rate by 0.75 percentage point, to a range between 2.25% and 2.5%, at this week’s meeting. While further rate rises are likely this year, Mr. Powell might be less specific about his expectation for their sizes, according to analysts.
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Mr. Powell has publicly signaled the central bank’s moves ahead of each policy meeting this year, as it accelerated the pace of removing stimulus to combat soaring inflation.
Immediately after the past two Fed meetings, Mr. Powell specified the expected rate move at the subsequent meeting. In May, he and his colleagues had indicated they would likely raise rates by a half percentage point, or 50 basis points, at their meeting in mid-June. But inflation data released days before the June gathering pointed to a worsening outlook and prompted them to approve a larger 0.75-point rate increase.
After the June meeting, Mr. Powell said officials were most likely to consider rate increases of a half point or 0.75 point at this week’s meeting. He also said the 0.75-point rate rise was “an unusually large one, and I do not expect moves of this size to be common.”
(Excerpt) Read more at wsj.com ...
“The FOMC meets three more times this year. I suspect that rates will be increased but at a lower number of points than tomorrow’s jump will be.”
DoodleDawg,
You’re financially astute.
Do you have a prediction on the rate increase tomorrow?
I’ll go with 1% hike on Wednesday, and three 1/2 percent hikes to finish off 2022.
If the Fed doesn't raise interest rates by AT LEAST 100 basis points, they're not serious about tackling inflation, period.
The Fed doesn’t have the fortitude to do what is necessary to save what’s left of the US economy.
50 cents interest on a 14,000.00 account on a savings account. Does that even count as income?
But the IRAs lost money.
“My savings account is with a major bank. The interest rate h”asn’t budged. It’s still 0.01% (not a misprint). CD’s might pay double that. Big deal.”
That’s crazy. Brick and mortar banks are for checking accounts. I’m getting 1.15% on liquid money at Ally Bank.
3 month T-bills at about 2.50% (annualized) aren’t bad either considering no tax bite.
If all the money the government has borrowed was charged 10% interest then the country would be way more than belly up.
I'll go with the consensus - .75%.
I'll agree with the three additional increases. The .5% seems reasonable now but the last one or two increases could drop to .25% depending on how things go.
When will my savings account payout rise in response?
Starting last month, the FED quit rolling over their Treasuries back into the government debt. Their plan is to reduce their holding of government debt by $1trillion per year.
It might just bury the bond market. And crash the US treasury. If they don't blink first.
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