Posted on 11/30/2022 10:47:43 AM PST by SaxxonWoods
Federal Reserve Chairman Jerome Powell will have an opportunity on Wednesday to lay the groundwork for where the central bank is headed when policy makers meet next month—and he’ll likely use it to make the case for slower but steady interest rate hikes.
In a speech Wednesday afternoon at the Brookings Institution, Powell is expected to reinforce the dual message central bank officials have been making for weeks: that the Fed is on track to ease up slightly on its pace of monetary policy tightening, likely slowing to a 50 basis point increase next month after four straight 75 basis point hikes.
But at the same time, Powell will likely note as well the central bank is still focused on reining in inflation and will continue raising interest rates for months to come—and policy makers may ultimately lift rates higher than they had once expected
(Excerpt) Read more at marketwatch.com ...
My guess had been two .5% raises followed by a .25% and that’s looks likely now.
The illegal Fed is not able to stop the inevitable. Depression times 10.
“The illegal Fed is not able to stop the inevitable. Depression times 10.”
HAHA! The funniest comment right off the bat, love it my FRiend!
That’s a total of 1.25%. Probably not enough.
I wish the Fed would just hurry up and overshoot. Inflation won’t turn lower until they do.
Possibly, though I remember when Greenspan did 7 .25% raises in a row and then walked them right back down with 7 drops of .25% in a row.
You could be right but remember it takes months for a raise to work its way into the economy. Most of the recent raises haven’t even had their effect yet. This is where the interesting guesswork takes place. I wouldn’t want that job myself, there’s no magic formula and an incredible number of surprises in both directions that can happen.
And apparently the markets loved what he said. NASDAQ is up 2.4% this afternoon.
“And apparently the markets loved what he said. NASDAQ is up 2.4% this afternoon”
Nasdaq tech stocks are the stocks most dependent on interest rates. 2.8% (now) is a mild reaction so far. Nasdaq is usually the most volatile exchange.
Thanks for reminding me to watch the Bond Market reaction, which is the important one.
Also, this headline from MarketWatch:
“Inflation slows, Fed’s Beige Book finds, but recession worries grow”
So, the rate will still be increasing (bad), but at a lower rate.
Um Yay...
So instead of raisin it .75% at a time (horrible!!) they will just increase it .50% at a time? (really bad)
Gosh... that’s wonderful
I have no position on what they should do, I just have to deal with what they do after they do it. Looks like I lucked out and bought some more T-Bonds at the right time recently.
I’ve got more maturing all the time in my ladder, now I how to decide what to do as they cash out. Probably reinvest but stay short-term. I’m not ready to pile into stocks yet though some preferred stocks look good. Maybe I’ll nibble there too.
if businesses worry about a recession, and act accordingly, there WILL be a recession. there’s a definite chicken/egg dynamic at play here.
my comment was not address to you, personally.
It was addressed to the contents of the article
Exactly! The sooner the better. Playing footsie with inflation is what gave us stagflation in the 70s. If it is to be stopped it has to be hammered. Volkered. That is the modern experience.
This is just death by a thousand cuts.
Not so much anymore as it did in the past. The rate increases of the past took months and months to work through the pipeline of things like mortgages. Not the case now. The impact is almost real time.
The problem is not the lag it is the magnitude of the increases and the hope of avoiding a recession prior to the elections. By the Taylor rule we have a long way to go to make rates high enough to preclude profit by borrowing cheap and gaining on that high. The impact is starting but not enough. When the UPS relief driver tells you that real estate has slowed down it is sort of like stock tips from the barber or the shoe shine boy... change is probably near.
My latest being pissed off is being boosted two medicare rate brackets by cap gains of 2020 I no longer have and to add insult to injury, had to pay taxes on with money out of ass national.
What nimrod thinks that one penny over a rate bracket makes double the premium reasonable. How can the bottom of that double premium bracket person have equal ability to pay as a person at the top of that bracket making double the threshold amount? Insanity! Did these dopes never hear of ratio and proportion?
It is not just that I hate the gooberment it is that there are so many reasons to hate it.
Increased profits from inflation have finally shown up as well. It is all funny money but PE ratios are going down. The market does not have to go up for that but it usually does. One reason to invest in equities is a hedge against inflation. All that money that we are paying for stuff has to be going somewhere and not much is being shared with labor. Not after the stay at home bunch extorted wage increases to return to work after they had been paid the equivalent of $18 an hour tax free. A chunk of cost is probably going to increased profits.
Bonds will go up but held bonds will go down. Getting interest is nice unless it does not pace inflation, and it usually does not; if for no other reason than that you just get your money back. Not a fan of bonds, not a fan of being a lender, never was. It works well for banks because of fractional banking, very well. Not so much with retail lending in my experience unless it can be like the time I bought 20% bonds in like ‘83. I’d do it again if I had any money of course.
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