Free Republic

Be careful what you wish for, as the looming rate cut anticipated at the Fed’s March 20th meeting might not bring the desired outcome. History suggests that the first cut often aligns with a market decline, typically indicative of a slowing economy or crisis. Concerns are surfacing, especially in California, where tax receipts have plummeted by 25%, raising questions about an impending recession. The Legislative Analyst’s Office (LAO) report indicates a downturn in 2022, supported by the triggering of the Sahm Rule, even though applying it to states sparks controversy.

The Internal Revenue Service penalty for tax underpayments has nearly tripled since 2021, putting gig economy workers and consultants at the largest risk of having to cough up big bucks to Uncle Sam. As of Oct. 1, the IRS will now charge 8% interest on estimated tax underpayments, up from 3% two years ago, according to The Wall Street Journal.

On Monday’s broadcast of CNBC’s “Squawk Box,” Treasury Secretary Janet Yellen acknowledged that we do need to have a fiscally responsible path, especially since “the higher interest rate environment does pose additional challenges” but we don’t need offsets for Israel and Ukraine spending since they are emergency spending. After Yellen pushed for the aid package proposed by the Biden administration for Israel and Ukraine, co-host Andrew Ross Sorkin asked, “[W]e are having our debt and deficit go up and up and up and up and up. We had Stan Druckenmiller on our program recently. He said, we are spending like...

Estimated annualized interest payments on the US government debt pile climbed past $1 trillion at the end of last month, Bloomberg analysis shows. That amount has doubled in the past 19 months, and is equivalent to 15.9% of the entire Federal budget for fiscal year 2022. The figures are calculated using US Treasury data which state the government’s monthly outstanding debt balances and the average interest it pays. The worsening metrics may reignite debate about the US fiscal path amid heavy borrowing from Washington. That dynamic has already helped drive up bond yields, threatened the return of the so-called bond...

Newly released records of discussions among Federal Reserve policymakers show that they expect one more interest rate hike and then they'll hold rates high for "some time," although a recent surge in long-term Treasury yields may have changed that calculus. Minutes from the central bank's most recent September meeting of the rate-setting Federal Open Market Committee (FOMC), released on Oct. 11, show that a "majority" of officials believe that one more rate hike "would likely be appropriate" to get inflation closer to the Fed's 2 percent target. At that meeting, FOMC members opted to keep rates unchanged within a range...

A group of academics have conducted a study that found that during the fastest pace of Fed interest rate hikes in 40 years, the majority of U.S. banks failed to hedge their interest rate risk. The report’s findings include the following: “Over three quarters of all reporting banks report no material use of interest rate swaps.” “Only 6% of aggregate assets in the U.S. banking system are hedged by interest rate swaps.” “Banks with the most fragile funding – i.e., those with highest uninsured leverage — sold or reduced their hedges during the monetary tightening. This allowed them to record...

The U.S. Federal Reserve may need to raise interest rates further to ensure inflation is contained, Federal Reserve chair Jerome Powell said on Friday in remarks that balanced declines in the pace of price increases over the past year with the surprising overperformance of the U.S. economy. Powell said Fed policymakers would "proceed carefully as we decide whether to tighten further," but also made clear that the central bank has not yet concluded that its benchmark interest rate is high enough to be sure that inflation returns to the 2 percent target. "It is the Fed’s job to bring inflation...

The Federal Reserve hiked its benchmark federal funds rate by a quarter of a percentage point on Wednesday after skipping the previous hike, bringing the rate to the highest level since 2001. The rate hike brings the Fed’s target rate within a range of 5.25% and 5.50%, making this the eleventh hike since March 2022, after temporarily pausing the rate increases in June. Most economists anticipated a quarter-point interest rate hike as a part of the ongoing effort to bring inflation down, bringing the high end of the range to the highest rate since January 2001, according to the Federal...

The Federal Reserve on Wednesday raised its benchmark interest rate by a quarter of a point, resuming its campaign to increase borrowing costs and crush inflation after a brief pause in June. The unanimous decision puts the key benchmark federal funds rate at a range of 5.25% to 5.5%, the highest since 2001, further restricting economic activity as the borrowing costs for homes, cars and other items march higher. It marks the 11th rate increase aimed at combating high inflation since policymakers began tightening in March 2022. Policymakers also left the door open to additional interest rate increases this year,...

How badly has Bidenomics and generally Federal spending has crippled the US? An example. The interest on US Federal debt is approaching $1 TRILLION (and Biden/Democrats REFUSE to cut any spending, not that Republicans are much better). To show up how messed up this is, the EU’s defense budget (remember Ukraine?) is far smaller that the US interest payments on their debt. That is, US interest payments alone on the massive Federal debt of over $32 trillion is over 6 times larger than the entire defense budget for the European Union! United States Secretary of Treasury Janet Yellen has an...

United States Secretary of Treasury Janet Yellen has an incredible job. She writes rubber checks to pay America’s bills. Yet, somehow, the rubber checks don’t bounce. Instead, like magic, they clear.How this all works, considering the nation’s technically insolvent, is quite miraculous. But it works, nonetheless. Again and again, the Treasury borrows money. And Washington spends it.Yellen likely knows that full faith and credit is too good to be true. The U.S. government’s gross fiscal mismanagement should call the veracity of its notes into question. But why focus on it when there’s an abundance to be acquired from weekly Treasury...

I am anxiously waiting for the US inflation report tomorrow, so I am just looking at the US Treasury yield curve, mortgage rates and cryptos today. The US Treasury 10Y-2Y yield curve stumbled (just like Biden and Bidenomics) to -91.166 basis points as the turnaround in M2 Money growth has stalled. Bankrate’s 30Y mortgage rate is up to 7.37%, that is UP 156% under Bidenomics. Bitcoin is down today. At least Solana is up. Since November 3, 2022, the US Dollar Index is DOWN -9.68%, Gold is UP 18.55% and Bitcoin (Elizabeth Warren’s latest obsession) is UP 51.11%.

Bidenomics, the massive Federal spending spree that helped drive inflation to 40 year highs, is the most top-down Soviet-style command economy model imaginable. As The Fed battles Bidenflation, the 30-year mortgage rate has now risen to 7.31%, a far cry from 2.88% when Biden was installed as President. That is a 154% increase in the 30-year mortgage rate under Bidenomics. The architect of Bidenflation, Snow Biden.

Jay Leno once quipped about the Obama meal. “Order anything you want and hand the bill to the person standing behind you.” Biden, like his boss Obama, is praciticing a similar strategy. Spend like a drunken sailor and just keep borrowing until the whole thing breaks. The barrage of fresh Treasury bills poised to hit the market over the next few months is merely a prelude of what’s yet to come: a wave of longer-term debt sales that’s seen driving bond yields even higher. Sales of government notes and bonds are set to begin rising in August, with net new...

Fed’s Powell to double down of hawish rate message. Or banks and consumers can expect no sugar tonight. Expect a hawkish Fed Chairman Jerome Powell to double down on the Fed’s commitment to vanquish inflation at his semiannual testimony before Congress on June 21-22. While the immediate audience will be lawmakers, the message will be aimed at markets, which remain unconvinced the Fed will hike by another 50 basis points, as indicated in the dot plot from the June FOMC meeting. Powell may raise his hawkish tone to push back against such views. Even as Powell is putting on a...

Secretary of State Antony Blinken reiterated the Biden administration’s position that it would not be in “our interest” to decouple from China during a Monday press conference in Beijing held after talks with genocidal Chinese dictator Xi Jinping. Blinken’s two-day trip to China marks the first time a U.S. secretary of state has met with Xi since 2018. After his meeting with Xi, Blinken reiterated that the administration is “not about decoupling” from China; instead, they are about “de-risking and diversifying.”

Foul Powell on the Prowl! Federal Reserve policymakers are about to take their first break from an interest-rate hiking campaign that started 15 months ago, even as they confront a resilient US economy and persistent inflation. The Federal Open Market Committee on Wednesday is expected to maintain its benchmark lending rate at the 5%-5.25% range, marking the first skip after 10 consecutive increases going back to March of last year. While officials’ efforts have helped to reduce price pressures in the US economy, inflation remains well above their goal. Investors’ focus will be on the Fed’s quarterly dot plot in...

Disney is facing furious fire after announcing that its getting ready to remove more than 50 different shows and movies from its streaming platforms. Deadline reported that a total of 58 titles will be leaving Disney+ and Hulu beginning on May 26 - and the internet is not happy about it. Disney has not given a specific reason for its decision to remove the titles - claiming in a statement from its chief financial officer that it is part of 'strategic changes in its approach to content curation' - however many are speculating that the company is attempting to delete...

What’s the issue with this new interest on reserves tool the Fed is using? Let's take a look. think the average American does not know that the US Federal Reserve currently pays 4.90% interest to banks on people’s checking and savings deposits—this includes the cash in the drawer! I just checked my personal savings account and I am currently getting .01% on my savings account. My hard-earned money is earning my bank 4.89% interest—this is not right. How much is your bank making off your deposits? Additionally, did you know that your deposits no longer get loaned out to small...

A new subvariant of COVID-19 is increasing in the US and is now responsible for nearly 10% of all new cases, according to alerts from the Centers for Disease Control and Prevention and World Health Organization. The CDC estimates that omicron strain XBB.1.16 — more commonly known as “Arcturus” — was the cause of 9.6% of new infections this week. That represents an increase from nearly 6% last week and about 3% the week prior. Because of the spike in infections, the World Health Organization is warning the public of the possibility that the new strain could become the dominant...