Thread: Fed Talk

Here’s everything the Fed is expected to announce, including the biggest rate hike in 28 years...

https://www.cnbc.com/2022/06/15/here...-28-years.html

Powell tells Congress the Fed is ‘strongly committed’ to bringing down inflation

Fed Chairman Jerome Powell said Wednesday that the central bank is “strongly committed” to bringing down inflation and can do so with its monetary policy tools.

That means higher interest rates until “compelling evidence” emerges that inflation is coming down.

https://www.cnbc.com/2022/06/22/powe...tion-down.html

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This may not be the best news for stocks. Yes, we all want to see inflation under control, but that means very tight money conditions from the Fed, and the stocks market is a fan of that type of environment.

The new headline from Powell's continued testimony to congress today is his use of the word unconditional when asked about the Fed's fight with inflation. This implies that the Fed has set their goal of price stability above other potential set backs including a consequential recession. But it seems that Powell believes a realistic implication of the Fed's monetary tightening will be a rise in unemployment which already sits at record lows. Powell also said he expects economic growth to pick up for the second half of 2022.

The doom and gloom surrounding the Fed's campaign against inflation reflects what the Fed thinks is a possible consequence but not necessarily a probable consequence.

Fed's Powell says commitment to curbing inflation is 'unconditional'

I always liked this guys common sense!

Fed sees ‘more restrictive’ policy as likely if inflation fails to come down, minutes say

Federal Reserve officials in June emphasized the need to fight inflation even if it meant slowing an economy that already appears on the brink of a recession, according to meeting minutes released Wednesday.

https://www.cnbc.com/2022/07/06/fed-...june-2022.html

I wonder what the lag expectations are for raising rates and inflation data. Will last month's rate hike have an effect on June's PCE or CPI? Or does the cascade from higher borrowing costs to consumer prices take much longer?

The probability of rate hikes continuing into Dec 2022 are still high so it doesn't look like the are monitoring, but going full force.

Right now there's a 48% chance the Fed Funds rate will be 3.5% at that meeting December meeting, a 29% chance of 3.75%, and it is currently 1.75%

0.75% rate hike:

Here’s what changed in the new Fed statement

Recent indicators of spending and production have softened. Nonetheless, job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.

More: https://www.cnbc.com/2022/07/27/here...-red-line.html

Originally Posted by tsptalk

0.75% rate hike:

Here’s what changed in the new Fed statement



More: https://www.cnbc.com/2022/07/27/here...-red-line.html

Slow and steady rate rise, acknowledgement that things aren’t so bad, and are slightly cooling. That’s a real plus for today.

Maybe one or two more rises until a wait-and-see moment? Could be.


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Are we in a recession? It doesn’t matter, Fed official says: ‘I’m focused on the inflation data’

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, told CBS’ “Face the Nation” that inflation poses a larger threat than a potential recession.“We’re going to do everything we can to avoid a recession, but we are committed to bringing inflation down, and we are going to do what we need to do,” Kashkari said.

https://www.cnbc.com/2022/07/31/are-...tion-data.html

Fed’s Bullard sees more interest rate hikes ahead and no U.S. recession

St. Louis Fed President James Bullard said he expects another 1.5 percentage points or so in interest rate increases this year.

“We’re not a recession right now. ... To some extent, a recession is in the eyes of the beholder,” he told CNBC.

Markets are pricing in another half percentage point rate hike from the Fed in September, though the chances of a third consecutive 0.75 percentage point move are rising.

https://www.cnbc.com/2022/08/03/feds...recession.html