Posted on 11/28/2022 11:03:28 AM PST by Right Wing Vegan
Federal Reserve officials Monday continued to push for higher for longer interest to bring down inflation that is running hotter than previously anticipated.
John Williams, president of the Federal Reserve Bank of New York, said Monday he expected inflation to moderate, but flagged drivers of underlying inflation, particularly in a red-hot labor market with “rapid” wage growth, as the most challenging.
The New York Fed chief forecast core PCE, the Fed's preferred inflation measure, to slow from its current level of 5.1% to between 3% and 3.5% next year, driven by slowing global growth and fewer supply chain disruption. That, however, is above the Fed’s September projections for inflation to drop to a range of 2.6% and 3.5%.
“Inflation is far too high, and persistently high inflation undermines the ability of our economy to perform at its full potential,” Williams said, reiterating the Fed’s message that ongoing rate hikes would be appropriate to dent growth and the pace of inflation.
The slowdown in growth is anticipated to push the unemployment rate to between 4.5% and 5% by the end of next year, Williams estimated. A Fed-induced slowdown --- at a time when global growth is on the ropes as China wrestles with a COVID-stricken economy -- has many worried about a potentially painful recession next year.
Treasury yields appear to have been pricing in the increasing prospect of a recession as a key part of the yield curve – the 2-year treasury yield over 10-year Treasury yield - remains deeply inverted, a harbinger for a recession.
But some Fed officials, who lean more hawkish and warn that markets are underpricing the risk of more aggressive Fed action, have pushed back against recession signals from the market, partly attributing the move in the yield curve to confidence that the Fed’s tightening will lead to disinflation.
“I think in this particular moment, this expected disinflation is partly leading to the yield curve inversion,” Federal Reserve Bank of St. Louis President James Bullard said on Monday.
“You have markets seeing a lot of inflation today, maybe over the next year or two, but not seeing very much inflation over the next five years or the next 10 years,” Bullard added. “You could interpret that as confidence in the Fed's programme that we're going to be able to get inflation back down to 2%.”
DOW down 448 (now)
They need to hit the market with another 75 basis point increase. Then wait for 6 months before anything else.
They need to stop this insanity and hold interest rates where they are, or even lower them a bit.
Correct. Their results from rate increases lag
DJIA
33,899.76
-447.27 (-1.30%)
11:07 PST
Inflation and mass firings inbound...
Just in time for Christmas.
So STFU you filthy peasants...
The only insanity I see is inflation at a 40 year high, and a stock and real estate market that are overvalued. The free money needs to get taken out of the market, and reward savers.
2023 ain’t gonna be pretty.
Fed Govs reminded everyone that a recession is still scheduled for 2023.
Wages might be going up-—but those of us on Soc Sec are still watching every penny.
Interest rates will do nothing in the face of the massive printing of more money.
Fed officials insist more hikes needed
= = =
They just need one hike — off a cliff.
Nope. I’m no economist, but I have been saying “doom” around Spring.
Not commensurate to inflation and goods/energy.
It took decades to get here. The massive DEMOCRAT spending over the last 2 years was the match that lit the inflation fire. It will take years to work all of this printed fiat money thru the system. Trying to "stop" inflation with a quick fix is INSANE. Sorry old peoole I love ya but for me I am not in favor of throwing the youngin's under the bus so you can afford to take trips to the casino on holidays and long weekends.
The Dow down 448 is a drop in the bucket.
It’s an old adage that “America (and all industrialized nations) run on oil”. Biden and the left’s insistence upon changing this to all electric, despite no plan to generate additional capacity or delivery infrastructure, is a sink or swim approach and so far we’re sinking. Additionally, the oil based plastics industry that permeates our markets will increase in costs to consumers as well.
I agree. The whole world is headed into a perfect storm. The USA must go down before the Globalists can implement what they describe as their “Liberal One World Government”.
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