Fed will overshoot rate increases

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Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been a lack of further progress toward the Committee's 2 percent inflation objective.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage‑backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr; Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N. Jefferson; Adriana D. Kugler; Loretta J. Mester; and Christopher J. Waller.
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www.federalreserve.gov

Federal Reserve issues FOMC statement

Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remaine
www.federalreserve.gov

Holding rates steady as expected. Slowing the pace of QT was (at least to me) unexpected.
 

Exclusive: Fed's Williams welcomes inflation data, not ready to seek rate cuts​

NEW YORK, May 16 (Reuters) - Federal Reserve Bank of New York President John Williams welcomed the arrival of softer consumer inflation data, he told Reuters, but said that positive news is not enough to call for the U.S. central bank to cut interest rates sometime soon.

While it is important not to overemphasize the latest economic news, the softer tone of April's Consumer Price Index is "kind of a positive development after a few months where the data were disappointing," Williams said in an interview with Reuters on Wednesday.

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Lulz:
Federal Reserve officials appear to have "no idea" what is happening when it comes to the inflation picture in the U.S., according to Julian Howard, lead investment director of multi-asset solutions at GAM.

His comments come as policymakers have in recent weeks been urging patience over interest rate cuts, arguing that inflation has fallen by less than previously expected and is still too sticky for the Fed to press ahead with easing monetary policy.

"I think the message that's coming through is that they have no idea what's going on," Howard said Wednesday on CNBC's "Squawk Box Europe."
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3o6Zt45jSpthw6NYHe.webp
 
That they don't know what they are doing, was clearly evident last Fall when they tried to say that they'd succeeded and were expecting three rate cuts in '24, probably starting in March.

That was dumb dumb dumb. All it did was reignite the markets with dreams of easy money.
Ie: the very expectations they were supposedly trying to tamp down by hiking rates to begin with. Lol
 
Joe King said:
That they don't know what they are doing, was clearly evident last Fall when they tried to say that they'd succeeded and were expecting three rate cuts in '24, probably starting in March.

That was dumb dumb dumb. All it did was reignite the markets with dreams of easy money.
Ie: the very expectations they were supposedly trying to tamp down by hiking rates to begin with. Lol
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Don't take what they said, at face value.

They knew better.

They were just trying to goose the market.

Stawk prices now are a function of ZIRP and QE. Buy with borrowed; hang on a short time, sell to a Greater Fool in two weeks, or six. Lather, rinse, repeat.

Now, the lie is becoming obvious.

This is the kind of scheisse that comes of disconnecting the cost of capital, from market forces, through reckless printing of fiat.
 

What the latest economic indicators mean for Fed rate cuts​

May 30, 2024

Stock futures (^DJI,^GSPC, ^IXIC) are in the red as investors digest this month's Gross Domestic Product (GDP) report, which fell below estimates. CFRA Research Chief Investment Strategist Sam Stovall joins Morning Brief to discuss how this GDP print could affect the Federal Reserve's next interest rate move.
Stovall notes that the GDP print is not nearly as important as the Personal Consumption Expenditures (CPE) report that will be released on Friday. The CPE print will provide a clearer picture of the impact of inflation on consumers, which Stovall adds is the most important factor as consumers make up about 70% of the overall economy.
He predicts the earliest rate cuts from the Fed could be in September, but it may be unlikely: "We have been saying for a while that we thought we'd get two cuts this year: September and December. But I would tend to say that we are becoming less confident about the start in September, so certainly a concern that investors have to deal with right now."


6:31
 
They held the line:
Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated. In recent months, there has been modest further progress toward the Committee's 2 percent inflation objective.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.

In support of its goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities. The Committee is strongly committed to returning inflation to its 2 percent objective.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
...
Click to expand...

www.federalreserve.gov

Federal Reserve issues FOMC statement

Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remaine
www.federalreserve.gov
 
The problem is government spending is so out of balance they have taken the tool of lowering rates away which is one of the reasons they raised rates to begin with.
 
Start your day with a laugh.

Federal Reserve Governor Michelle Bowman said Tuesday the time is not right yet to start lowering interest rates, adding she would be open to raising if inflation doesn't pull back.

"Should the incoming data indicate that inflation is moving sustainably toward our 2 percent goal, it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive," Bowman said in prepared remarks for a speech in London. "However, we are still not yet at the point where it is appropriate to lower the policy rate."
...
"I remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse," she said. "Given the risks and uncertainties regarding my economic outlook, I will remain cautious in my approach to considering future changes in the stance of policy."
...
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Fiscal doom loop it is then.
 

Fed Chair Powell says holding rates high for too long could jeopardize economic growth​

  • Federal Reserve Chair Jerome Powell on Tuesday expressed concern that holding interest rates too high for too long could jeopardize economic growth.
  • “Reducing policy restraint too late or too little could unduly weaken economic activity and employment,” Powell said in remarks for appearances this week on Capitol Hill.
Federal Reserve Chair Jerome Powell on Tuesday expressed concern that holding interest rates too high for too long could jeopardize economic growth.

Setting the stage for a two-day appearance on Capitol Hill this week, the central bank leader said the economy remains strong as does the labor market, despite some recent cooling. Powell cited some easing in inflation, which he said policymakers stay resolute in bringing down to their 2% goal.

“At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” he said in prepared remarks. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”

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ZIRP-QE-Infinity.

Or, until the dollar collapses...which will be, as things are, about eight months.
 
Fortune

Donald Trump told the Fed not to cut rates before the election—but Wall Street is convinced he won’t get his way​

September is seemingly the month Wall Street is pencilling in a cut to the base rate by the Fed—but former President Donald Trump won't be pleased.

In an interview with Bloomberg released last week, the current Republican presidential nominee attempted to quash any plans to cut the base rate ahead of the November elections.

"It’s something that they know they shouldn’t be doing,” Trump said of the politically independent, non-partisan organization.

The former TV star—having previously indicated he would oust chairman Jerome Powell—reversed his stance in the interview and said he would let Powell serve out the rest of his term “especially if I thought he was doing the right thing.”

Yet Wall Street, at least, seems certain Powell and his six colleagues on the Board of Governors are going to defy the Republican nominee.

Their confidence springs both from slowing economic data and from public remarks made by members of the board in recent weeks.

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I don't think a Fed rate cut at this point is going to move any needles on the political landscape for November. Trump assassination attempt and Biden dementia drama are likely dwarfing economic concerns for most voters.
 
Why does the best economy ever, as we're told it supposedly is, need any rate cut?

Shouldn't the best economy ever, be able to handle historically normal rates?
 
Joe King said:
Why does the best economy ever, as we're told it supposedly is, need any rate cut?

Shouldn't the best economy ever, be able to handle historically normal rates?
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Normal rates, to the Left, have nothing to do with markets.

Normal rates are determined by your POLITICAL STANDING. Good SJWs get Zero.

The Sheeple get rates dependent on their purchases. Solar panels, Zero. Bicycles, Zero. Normal, usable cars...no credit.

Likewise, MAGA types. Your Social-Credit is zero, ergo your FICO is zero.

And you can't have cash to buy things with. Because only criminals use cash - criminals LIKE YOU.

Starve, peon.



Suck it up - this is the wonderful Surveillance State they're building for us.
 

Why In The World Is The Fed Manipulating Interest Rates In The First Place?​

Steve Forbes warns that media coverage is ignoring of the key fiduciary questions of our time—why the Federal Reserve can manipulate interest rates—and urges economists to wake up to this absurdity before it's too late.


4:08
 

Fed steaming toward September rate cut, minutes from meeting show​

WASHINGTON, Aug 21 (Reuters) - The Federal Reserve appears to be very much on track for an interest rate cut in September after a "vast majority" of officials said such an action was likely, according to the minutes of the U.S. central bank's July 30-31 meeting.

The minutes, which were released on Wednesday, even showed some policymakers would have been willing to reduce borrowing costs at last month's gathering.

The policy-setting Federal Open Market Committee left its benchmark interest rate unchanged in the 5.25%-5.50% range on July 31, but opened the door to a cut at the Sept. 17-18 meeting.

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There is no need for a fed when congress can just print all the money it wants interest free. Of course the constitution reads that they can coin money as needed and regulate the value thereof. So if they want to make 1 ounce coins 2500 they can. They can also make them 10,000 or 100,000. They have that power.
I'm not sure that Nixon taking us off the gold standard was constitutional. I also don't think Roosevelts executive order was constitutional. I don't think paper currency is constitutional. Definitely not what the founders had in mind. No way they would have ever wanted the federal government stealing money from the people via taxation and then having any politician in charge of deciding which companies would receive those tax dollars. Thats why the federal reserve act was so heinous. We now have 40 million at least on welfare. Millions of illegals being flown into the country via DHS and other NGO's. Remember DHS was created at a cost of a trillion dollars originally and now is being used to thwart elections and other nefarious reasons. Everything except doing the one thing they are supposed to do which is keeping the country safe. Same goes for many of the other 3 letter agencies. None of this would be possible without the federal reserve act.
 
Related. In this one Nick talks about inflation, interest rates and more while walking through the gold district in Istanbul.

Lessons From Turkey On Surviving Hyperinflation (Are We Repeating Their Mistakes?)​

Sep 8, 2024 İSTANBUL

Turkey has had inflation of over 100% in the last two years. What caused it? Turkish President Erdogan claimed that he will lower inflation by lowering interest rates. This policy has been a disaster that is now being reversed with 50% interest rates. Is Jerome Powell and the Fed going down this path of lowering interest rates when inflation has not come down enough only to help out a presidential candidate and the rich on Wall Street that own most of the stock market wealth?
What can we learn in America about the failed policies that the government tries to implement instead of cutting back on spending and increasing our national debt by continuing to print money?
The so called experts only come up with excuses and more bad ideas to hide from their only solution of printing money. When you realize this, you will see that we could very easily end up with a high inflation like Turkey.
There are lessons to be learned on how to prepare for runaway inflation in the US. Like the Turkish, we should be owning real assets like gold, real estate, and stocks of companies that can raise their prices during periods of hyperinflation.


8:06
 
First, they can only stop inflation by stopping money-creation and government deficit-spending.

Second, they don't WANT to stop it. Not here; not in Turkey, not anywhere. Inflation is a tax, the one that the Elites continuously deny even as they impose and increase it.

It ends with collapse. Check your safety harnesses....
 
So the markets are pricing in a 25-50bp cut on Wednesday (even though "target inflation" has not be achieved... :cough, cough:... election). This means that anything less that 50bp will severely disappoint the equities markets. In fact, even 50bp will not be a surprise, so I don't see any equity upside from this decision.

My expectation is that Wednesday afternoon might be a good time to go shopping for quality stocks that are knocked down by broader market movements. Today and tomorrow are probably good days to take some off the table (especially tech and RE) and build up some dry powder for Wednesday.

But what do I know? The markets always surprise me. DYODD.
 
In addition to possibly disappointing US markets, a rate cut is likely to exacerbate liquidation pressure on the Yen carry trade.
 
No bull argument for near-term upside from here--substantial rate cut fully priced in. (FYI... if you haven't notice yet, the FED is the only trade in town.)

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<SLV> said:
So the markets are pricing in a 25-50bp cut on Wednesday (even though "target inflation" has not be achieved... :cough, cough:... election). This means that anything less that 50bp will severely disappoint the equities markets. In fact, even 50bp will not be a surprise, so I don't see any equity upside from this decision.

My expectation is that Wednesday afternoon might be a good time to go shopping for quality stocks that are knocked down by broader market movements. Today and tomorrow are probably good days to take some off the table (especially tech and RE) and build up some dry powder for Wednesday.

But what do I know? The markets always surprise me. DYODD.
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Screenshot_20240917_212026_DuckDuckGo.jpg
 
.50 today. Time to start watching interest rates.


 
My feeling is, .50 won't make a real difference, look for politicians demanding more soon.
 
Powell had no choice. The markets had leaned so far into the 1/2 cut narrative that he didn't dare risk disappointing them. I guess you could say the Fed is really a puppet, but maybe it isn't the politicians that are pulling the strings.
 
<SLV> said:
Powell had no choice. The markets had leaned so far into the 1/2 cut narrative that he didn't dare risk disappointing them. I guess you could say the Fed is really a puppet, but maybe it isn't the politicians that are pulling the strings.
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Nope, not politicians.

People, and organizations, with money. Many, maybe most, of them are not American. None of them have any true allegiance to America or its people.

That's why they're Globalists. They think of themselves and the organizations they run, as beyond any government or law.

The Fed is one more pawn on the chess board. Or so they think. They may own the Fed chairman but the Fed is an insentient hot potato, or time bomb. When it blows up, the debt-dollar evaporates and so does the Globalists' power.
 
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