Fed will overshoot rate increases

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Major slowing happening in inflation. Signals of a slowdown in corporate earnings misses and reduced forward guidance. Housing market cooling fast

Fed should pause rate hikes now and let the dust settle from their recent flury of significant increases. But...... they won't. Recession is already here. Where will it stop?


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pmbug

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... Where will it stop?
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nickndfl

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The stock market says NOV is the last big hike. We will see.
 

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Canada already blinked and raised rates less than expected. I expect the Fed to come with 50 basis points... maybe a surprise if some are expecting continued 75 basis point hikes. They SHOULD stop now and let things shake out.
 

Joe King

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what's gonna happen once the house of saud and a few other places decide they don't need our Inflation/Deflation/Recession/Depression woes, or any other United States woes, ever again, and they stop using our currency?
99.999% of the population will get 80 years of economic lessons in one fell swoop, would be my guess. Lol
 

nickndfl

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Canada already blinked and raised rates less than expected. I expect the Fed to come with 50 basis points... maybe a surprise if some are expecting continued 75 basis point hikes. They SHOULD stop now and let things shake out.
Bullseye, but the US stock market is signaling either news of a near future pivot or sucked a bunch of greedy assholes into a bear trap.
 
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cheka

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not convinced it will be 'over shoot'. just as likely an intentional crashing -- just like (their) intentional pro-inflationary actions that had people begging/screaming for them to stop the madness.

they played dumb on missing the soaring inflation. they'll play dumb when the recession pain sets in

first by inflation, then by deflation.....

it's what (they) do
 

Joe King

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Here is a vid that takes a look at the historical record of what happened in all economies over the past hundred years after inflation spiked to 8%.

I'm not saying it can't happen, but the odds of a quick return to ~2% inflation is not in our favor.
....and the odds of it get worse with the less time looked at. Ie: the best average outcome is shown when looking at the full 100 years. The worst average outcome is when one only looks at data since 1970.


About 9 minutes, with a minute or two of that being a plug for a hair loss product.
...but that can be easily fast forwarded through.




My prediction, which btw comes with a double your money back guarantee lol, says they will keep the pedal to the metal. At least 75, and possibly 100.
....and if the next inflation numbers aren't better than the last ones, expect it again next Month.
 
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Edsl48

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Back in ancient times the interest rates were supposed to equal the rate of inflation added to a rate to reward the lender(saver) for the use of their capital. Today the Fed has it way below the inflation rate as it does its best to blow bubbles making savings a losing game. At this point, assuming 8% inflation, a rate of 10% to 12% should be in order. I find it highly unlikely that will happen because of political pressures from assorted interest like the Real Estate industry.
Powell is safe until 2028 so he just may continue to kick rates up but, when his term nears its end he may lower rates to let the newer President look good so as to be reappointed by the new guy/gal. (just a whimsical thought I am having here)
 

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At this point, assuming 8% inflation, a rate of 10% to 12% should be in order. I find it highly unlikely that will happen because of political pressures from assorted interest like the Real Estate industry.
Or the gov itself, as it could not afford 8-12% rates for very long.

This is another reason why I think the fed will continue to raise rates. Because it cannot chance backing off too early and allowing inflation to come roaring back. Thereby forcing them to start raising rates again.
Imo, they have to squash it good the first time, and do so quickly.
 
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Joe King

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Here is a vid that takes a look at the historical record of what happened in all economies over the past hundred years after inflation spiked to 8%.
For those who do not watch vids, here is one of the charts used in the vid I posted above, that shows the information talked about in the vid.

Notice how the projections for future reductions in inflation are below the low end range of the historical data. Never, has inflation fallen as fast as what the "experts" are predicting today.
...nor had it ever risen as fast as our current inflation rate has.

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Edsl48

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Or the gov itself, as it could not afford 8-12% rates for very long.
...
Yes and that is quite a problem that was predicted back in the inflationary times caused by LBJs Vietnam war and his Great Society programs. Would the Government continue to function when it does not have the ability to pay the interest on its debt. I have watched this from the sidelines over the last 50 years and the continuing decline in interest rates kept the Government plodding along. To me this seems as if we are finally at t he end of the road for can kicking so if the Government can't pay its interest then massive money printing will take over eradicating t he value of the dollar. However similarly if rates are kept low inflation will continue to eradicate the value of the dollar. I think the political/bankers have painted themselves into a corner to where it is finally damned if they do and damned if they don't.
 
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Real numbers. Inflation is falling.

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Joe King

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. To me this seems as if we are finally at t he end of the road for can kicking
Sure seems that way.


so if the Government can't pay its interest then massive money printing will take over eradicating t he value of the dollar
Doing it in the increasingly de-dollarized World will only make it worse.
...but else would they be able to do?

I think the political/bankers have painted themselves into a corner to where it is finally damned if they do and damned if they don't.
From the day this insane inflationary fiat monetary sytem was started, eventually painting themselves into a corner was baked in the cake.

The only ones who did not think that it would, are the ones in the "this time it's different" crowd.

I see it as, how could it not end that way?



Real numbers. Inflation is falling.
Yea, to a low 8% per your chart.
 

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I have posted many times in many places over the years that our experiment with fiat currency is akin to playing Shoot the Moon with a set of infinitely long rails. Central banks adjust the rails - loosening and tightening the pressure to keep the ball rolling, but eventually the ball's momentum is going to escape the pressure. It's impossible to keep playing the game forever.
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Edsl48

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One might say the path to inflation was FDR's gold confiscation scheme. He may have known the end result but he knew that the eventual end would come for someone else...not him
 

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I remember when silver still circulated in our coins and saving funds for a rainy day was virtuous. Money and people were more honest, but society changed drastically in 1965.
 

cheka

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Buck

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it's fun to watch the varying interpretations of what Inflation really is

there's even charts that log TruInflation while they admit, they following CPI numbers...so, that's CPI not Inflation


we're never gonna get it right until we all agree: Inflation is the Amount In Circulation, The Money Available to be Dispensed / Used by The World

it's not what's the cost of a Can of Beans...that's CPI...we're arguing a false narrative that will NEVER be resolved either rationally or irrationally as it's not an issue , not a truth, not a standard at all (it's a repeat of CPI with a few extra trimmings involved...)

It's Their Narrative, It's Their Path, all designed and propagated to never allow us to ever see what their other hand is doing, while also never acknowledging the one hand is up our asses, reaching for our wallets, handing us double-speak that has kept us financially divided for decades


It's Their Fault, Real Inflation...they've printed us into eternity

and they want us believing it's our fault and we'd better work harder and save even more while using credit to prevent suffering from FOMO

basic BS and i'm tired of the 'experts' telling us stories about how it actually never was and we're to accept it, stay smart, don't make any large moves while the markets are a bit unstable, and hold on for the long run...

never telling anyone the losses they take today will NEVER BE RECOVERED


ever


sham, really
crimes against humanity, actually
 

Joe King

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In a sane World, they'd have started slowly raising rates a Decade ago.
 

gringott

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The first day of school is a bitch. You don't know what the heck is going to happen.

I was getting an insurance quote and I got a rude awaking I must have been sleeping.

House was insured for full replacement value, normal standard outriders. Paid around $1200 for $120k market value what they came up with.
I much remodeling so this has updated mechancials windows doors etc, and a nice deck 8 yo, I paid $65.9 April 96. Built 1980. about 1600 sq feet raised ranch type brick veener shingles replaced 2002. Two sheds, no garage. 1/4 acre. Lowest police calls in the county. Fire hydrant one house away.

The quote was $1400 but reasons. I am cool with the $200 rise. The issue was she said the house replacement cost was $300K.
The PVA (I called) said property will be revalued every four years and my area was done during the last few months or something. Right now they have it at about $102K and after much begging she said in this area diff between them and the real estate appraisal is normally 12% to 15% based on history here. Okay.


The kicker is, the $300k replacement cost can go to $5 Million limit during the year, no more.

Think about that.
 

gringott

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How am I going to pay property tax on a $5 million dollar house a little less than 4 years from now.

But if they put a limit at $5 million then that means they think it could go higher. Everybody understands this is what the cost to replace the house may come to in one year, from $120k to $5m. Globalism is a heck of a drug.
 
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Buck

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In a sane World, they'd have started slowly raising rates a Decade ago.
how much money do we think they've printed since 2008?

that's the problem, they were too busy printing and distributing to figure out how to get it all to come back

(. . .that was in the chapter, in their play book, the chapter between the one about the pandemic, and the one about how all that printed money was theirs to use to fight against us and our ancient constitution...that was supposed to be unsealed during H's watch)


and imagine the amount that's stuck to their collective fingers? never getting to it's intended use...
 

Joe King

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that's the problem, they were too busy printing and distributing to figure out how to get it all to come back
It's supposed to come back on its own. It works kinda like letting go of something you love. If it loves you it'll come back to you on its own.



Newly created money comes into existence via a loan. When the loan gets paid back, it becomes extinguished.

Problem is, the newly created money exceeds the amount that gets extinguished.
...and lately, faaar exceeds it. Ie: Not enough of it loves the fed.

That's why the fed is currently on the path of currrency destruction.
 

cheka

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good time to be a repo man

'loan accomodation programs' = black hole, like so many other welfare schemes

not my bold


Auto loan delinquencies have risen to the highest level in over 10 years, according to TransUnion.

TransUnion tracks more than 81 million auto loans in the United States. According to the consumer credit reporting agency, 1.65% of auto loans were at least 60 days delinquent in the third quarter. That is the highest rate for 60-day-plus delinquencies in more than a decade.

TransUnion senior vice-president Satyan Merchant told CNBC inflation was making it difficult for people to keep up with their car payments.

Consumers still want to stay current as best that they can. It’s just this inflationary environment is making it challenging. It leaves fewer dollars in their pocket to make the auto loan payment, because they’ve got to pay more for eggs and milk and other things.”
Unsurprisingly, subprime borrowers are having the most difficult time keeping up with their payments.

With loan-accommodation programs implemented during the pandemic, some borrowers managed to avoid delinquency. As those programs have ended, delinquencies have spiked. Merchant told CNBC that these programs pushed some delinquencies into the future.

According to TransUnion, 200,000 borrowers who took advantage of the pandemic-era auto loan accommodation programs are now listed as 60 days delinquent.
 

BackwardsEngineer

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the real question is how do you surf a tidal wave of turds? Multi generational fortunes will be made, but if you move too quick or get screwed on title you'll see chuck Barris hitting the big gong... ME I'm going out dancing Backwardsengineer officially or at least in my mind changing my name to gene gene the dancing machine

 
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