Welcome to the PMBug forums - a watering hole for folks interested in gold, silver, precious metals, sound money, investing, market and economic news, central bank monetary policies, politics and more. You can visit the forum page to see the list of forum nodes (categories/rooms) for topics.
Why not register an account and join the discussions? When you register an account and log in, you may enjoy additional benefits including no Google ads, market data/charts, access to trade/barter with the community and much more. Registering an account is free - you have nothing to lose!
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.
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."
...
Don't take what they said, at face value.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
At least we can rest assured that we have an independent Fed that is acting in the best interest of the citizenry.
Please, Please a least a few months before the election! (Selection)
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.
...
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."
...
Relative the zero the markets want, yes they are. lolThese rates are "high"?
Normal rates, to the Left, have nothing to do with markets.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?
It's really pretty simple,Why In The World Is The Fed Manipulating Interest Rates In The First Place?
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.
Nope, not politicians.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.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?