Posted on 02/27/2018 8:36:53 AM PST by SeekAndFind
Federal Reserve chair Jerome Powell moved markets on Tuesday in his first appearance before lawmakers on Capitol Hill since his confirmation.
In response to questions from Rep. Carolyn Maloney (D-NY), Powell hinted that more aggressive action on raising interest rates from the Fed could be warranted this year.
“At the December meeting, the median [FOMC] participant called for three rate increases in 2018,” Powell said. “Now since then, what we’ve seen is incoming data that suggests a strengthening in the economy.”
Following this comment, stocks — which had been higher as Powell began speaking and answering questions — moved lower across the board with the major averages moving to losses on the day of about 0.2%. Bonds were also on the move, with yields pressing higher after falling on Monday, with the 2-year yield hitting 2.26% and the 10-year yield rising to 2.89%. Last week, the 10-year hit a four-year high of 2.95%.
“We’ve seen continuing strength in the labor market, we’ve seen some data that will — in my case — add some confidence to my view that inflation is moving up to target,” Powell added. “We’ve also seen continued [economic] strength around the globe, and we’ve seen fiscal policy become more stimulative.
“I think each of us is going to be taking the developments since the December meeting into account and writing down our new rate paths as we go into the March meeting and I wouldn’t want to pre-judge that.”
Markets, however, are clearly taking Powell’s comments as a sign that his view on the economy will be upgraded notably when the Fed’s next set of economic projections is released in just over two weeks.
The read-through from markets is that Powell will not be the only Fed official to move their view of the economy,
(Excerpt) Read more at finance.yahoo.com ...
The Fed needs to STFU. Things are fine, or were, stop tweaking.
I’m POd that these guys covered for Obama by their low interest and spending policies propping up the market.
At the same time, it is crazy to keep up that policy and create a fake market.
My guess is that the President approves of their getting back to reality.
Good. Free money is no way to encourage responsible behaviour.
Well, that will take care of the housing market.... POOOF.
Buy your QQQ puts now.
I also remember earning 14.3% on my money market mutual fund back in 1981. Ah, the good old days when I didn’t have money saved yet......
So why announce this?
Yup, now us folks that save can earn a little more interest.
Bring rates up to historic levels. Keeping rates ridiculously low is creating a monstrous over-valuation of stocks and real-estate. In other words FED has created the biggest bubble in 1000 years. The inevitable crash will also be historic.
This is crappy news for those of us who are desperate to sell our old home and get a mortgage on a home in our new work location... made even worse by the necessity to get the old house sold FIRST...
And as others have posted - “if it ain’t broke, don’t “fix” it”... economy is moving well, inflation is still not significant. Ugh
Because Wall Street hates surprises. Getting the news out early softens the market reaction.
What planet are you living on? Mortgage rates are lower than in 8 decades. What do you want? Lenders to lend you money at rates lower than ACTUAL INFLATION?
Necessities such as groceries, utility bills, doctors fees, lawyers fees for divorce and wills, property taxes, etc are escalating way above the FED interest rates.
Agreed, the FED re-elected Obama by keeping interest rates lower than a midget.
When a clear, soft moderate like Powell talks 4 increases in a year...you know we’re overdue.
This is the clearest indicator that debt deflation has been defeated and raucous inflation is on the horizon.
And now is the time to position for it.
Borrow money, buy houses. And farms. And anything real.
Listening to this hearing, I am both disgusted and pissed off by the constant yammering about “What about black folks? When do we get more.........” etc. Makes me gag!!
There goes our bond index funds in retirement this year, at least with the net asset value ...
He was speaking at a required Congressional hearing. He didn't say things weren't fine. Just the opposite in fact. Rates have been held artificially low for a long time. They need to be raised. They should have been years ago.
Interest rate on my credit card has already climbed the past two months so not glad to hear this news. Hassle to transfer balance to another card but may be necessary this year.
Don’t make many purchases but did put a couple of large ones on the card. Won’t do that anymore.
Two 25 basis points would be enough.
See Fred and analize the data.
And no, I’m not going to explain my position unless you pay money.
5.56mm
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