Fed will overshoot rate increases

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Voodoo said:
Can't be done. Sorry too late, its just math. I don't think it ever really could be done in a debt based system. Unless there is no interest on the debt.
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In that case, throw the student loans on the burn pile too, can't be asking the kids to do what we don't have the balls to do.
 
Voodoo said:
Can't be done. Sorry too late, its just math. I don't think it ever really could be done in a debt based system. Unless there is no interest on the debt.
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The interest gets spent back into circulation and can therefore be used again to pay further interest.

Also, the bonds the gov owes on are mostly from already existing money. Therefore most of the principle gets re-spent into circulation too.



Fatrat said:
At this point I'd rather "Crash and burn" here...stick the proverbial gun to the head and start the fight now.
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No one is going to just let the system crash if the means to not have it crash right now, still exists.
 
They will.monetize the debt to lower it and send it to the future.
 
That's another thing we got to stop, I'm angry as hell at all the bastards who dumped this shit on me. No dumping it on the next guy...
 
Fatrat said:
That's another thing we got to stop, I'm angry as hell at all the bastards who dumped this shit on me. No dumping it on the next guy...
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Then that means you gotta be the one to pay it instead of passing it along.
....but you can't. Same as the ones that handed it to you couldn't.


By "you", I mean this current generation.
 

Potential Fed chair pick David Zervos of Jefferies backs aggressive interest rate cuts​

  • Wall Street veteran David Zervos added his name Thursday to the list of potential Federal Reserve chairs who think the central bank is past due in approving an interest rate reduction.
  • For the past three Fed meetings, Zervos has advocated a half percentage point cut in the federal funds rate, and he repeated that position during a CNBC interview.
Wall Street veteran David Zervos added his name Thursday to the list of potential Federal Reserve chairs who think the central bank is past due in approving an interest rate reduction.

The chief market strategist at Jefferies told CNBC that central bankers shouldn’t be daunted by the July producer price index showing pipeline inflation pressures hotter than expected.

Instead, he advocated the Fed move aggressively now to ease as a way to forestall a labor market slowdown and in fact help create a million more jobs. For the past three Fed meetings, Zervos has advocated a half percentage point cut in the federal funds rate, and he repeated that position during an interview.

More:

 
They were talking 1/4 point cuts last week and this week it's 1/2. How about two 3/4 cuts instead?
 

Fed Chair Jerome Powell may seriously disappoint Wall Street at Jackson Hole​

  • Wall Street overwhelmingly expects the Federal Reserve to cut rates next month, and Chairman Jerome Powell’s speech on Friday will give him a chance to hint at which direction policymakers are headed. But some analysts don’t think a September rate cut is in the bag, and even some that do expect a cut are doubtful that Powell will tease it at Jackson Hole.
All eyes will turn to Federal Reserve Chairman Jerome Powell on Friday, when he is scheduled to deliver a highly anticipated speech at a central bank conference in Jackson Hole, Wyo.

The annual event previously has served as an opportunity for policymakers to tease forthcoming rate moves. Last year, Powell signaled a pivot to cuts, saying “the time has come for policy to adjust” and that “my confidence has grown that inflation is on a sustainable path back to 2%.”

Wall Street overwhelmingly expects the Fed to resume rate cuts in September, after holding off for months as President Donald Trump’s tariffs ripple through the economy. That’s as Trump and the White House have put immense pressure on the Fed to ease while a more dovish governor was named to the board of governors.

More:

https://www.msn.com/en-us/money/eco...-at-jackson-hole/ar-AA1KGVeL?ocid=socialshare
 

Fed Chair Powell set to deliver big Jackson Hole speech Friday. Here’s what Wall Street expects​


  • Fed Chair Jerome Powell is set to deliver what almost certainly will be his last keynote address at the central bank’s annual conclave during one of the most tumultuous times in its history.
  • Amid several controversies, Powell could use the speech to at least take a sideswipe at the political distractions even if he holds to past practice of not taking direct aim.
  • The speech is billed as an “Economic Outlook and Framework Review,” indicating Powell will take time to provide his views on broad conditions as well as discuss the Fed’s long-term policy goals.
Federal Reserve Chair Jerome Powell is set to deliver what almost certainly will be his last keynote address at the central bank’s annual conclave during one of the most tumultuous times in its history.

What’s at stake is the near-term sentiment for financial markets, the longer-term path of the Fed’s policy trajectory, and a not insignificant dose of trying to preserve vestiges of independence at a time when the normally sacrosanct institution is facing enormous political pressure.

If Friday’s speech at Jackson Hole, Wyoming, goes at all like Powell’s first seven-plus years in office, it will feature a calm and collected veneer even if masking the weight that he and his colleagues have been under all year.

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Trump has fired Fed board member Lisa Cook. The Fed board will either bend the knee or face a kangaroo court and be removed apparently. Market is understanding that the Fed board is more likely to cut rates to Trump's whim now. Gold and silver popped up and the dollar index is down.
 
Firing Lisa Cook will backfire, basically she is accused of the same financial shenanigans Trump was accused of. About impossible to prove and dubious at best.
 
Looks like she may not leave. Be interesting to see how this plays out.

 
^
Might be wrong but I think T may be trying to get rid of anyone who won't bow their head to him, replace them with boot licking trash so he can be the one making all decisions. I don't think the just wants to be a dictator, he wants to be a god.

 

Fed responds to Trump effort to fire Lisa Cook​

  • The Federal Reserve said it would abide by any court decision on whether President Donald Trump has the legal authority to fire Board of Governors member Lisa Cook.
  • Trump said on Monday night he was removing Cook as Fed governor because of allegations that she committed mortgage fraud.
  • The Fed noted that presidents can only remove the central bank’s governors “for cause.”
  • Cook has vowed not to quit her post.
The Federal Reserve on Tuesday said it would abide by any court decision on whether President Donald Trump has the legal authority to fire Board of Governors member Lisa Cook.

The Fed, in a statement from a spokesperson, noted that “Cook has indicated through her personal attorney that she will promptly challenge this action in court and seek a judicial decision that would confirm her ability to continue to fulfill her responsibilities as a Senate-confirmed member of the Board of Governors of the Federal Reserve System.”

More:

 
searcher said:
^
Might be wrong but I think T may be trying to get rid of anyone who won't bow their head to him, replace them with boot licking trash so he can be the one making all decisions. I don't think the just wants to be a dictator, he wants to be a god.

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So you think it's ok for her to lie on her mortgage applications?

All we heard for the past Decade is that no one is above the law, and the law clearly states that the potus can fire them "for cause".

You act as though he just woke up and decided to fire her for no cause at all.


Fatrat said:
Firing Lisa Cook will backfire, basically she is accused of the same financial shenanigans Trump was accused of. About impossible to prove and dubious at best.
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How is it impossible to prove? She signed the docs stating that both homes would be her primary residences, and did both within a short time.

In a position like hers, she should avoid even the appearance of impropriety.
 
EndGame Macro said:
The Risk of the U.S. Economy No One Is Talking About

If the Fed cuts rates in September, history suggests it will likely confirm the beginning of an easing cycle that coincides with rising unemployment. Every sustained easing cycle of the past half century has followed, not prevented, economic deterioration. This time, the risks stretch across every layer of the credit system, leaving households, banks, pensions, and governments exposed.

Corporate bonds are the first fault line. High yield still pays north of 7% and investment grade 5–6%, but spreads are near historic lows, leaving little buffer against defaults already climbing above 4%. Companies that borrowed cheaply in the 2010s now face refinancing at double or triple those rates. Lower Fed Funds won’t solve the problem: weaker earnings and a slowing economy will pressure debt service further. Banks and insurers that hold leveraged loans and corporate bonds will face both rising defaults and declining recovery values.

Municipalities look safer on paper, but the cracks are clear. Cities and towns rely on property tax backed bonds to fund schools, roads, and infrastructure. If the Fed is cutting because growth and employment are weakening, property values and tax receipts will follow. Debt service, however, is fixed. That leaves local governments forced to raise taxes on a shrinking base or cut essential services. The burden ultimately falls on taxpayers and public sector workers, while muni bondholders expect to be paid in full.

Pensions sit directly in the middle. Decades of low yields forced them into private equity, real estate, and high yield credit. These illiquid assets can mask valuation declines until a downturn forces recognition. Meanwhile, pensions are structurally cash flow negative: more going out to retirees than coming in from workers. As unemployment rises, contributions shrink further, forcing more asset sales into weak markets. Retirees, municipal governments, and ultimately taxpayers are exposed when funding gaps widen.

At the top of the system lies the federal government. Between now and 2026, $12–14 trillion of debt must be refinanced. Much of it was issued when rates were near 1.5%; it now rolls at 4–5%. Even with Fed cuts, Treasury issuance remains enormous, crowding out demand for risk assets. Interest costs are on track to exceed $1 trillion annually, straining fiscal capacity. Holders of Treasuries like banks, pensions, foreign governments are exposed to both mark to market losses and the risk of crowd out that pressures every other borrower.

Finally, households, the ground floor of the credit system are already flashing red. Serious credit card delinquencies are near financial crisis levels. Auto loan delinquencies, especially in subprime, have surpassed them. Student loan delinquencies are climbing fast since the payment pause ended. And commercial office space delinquencies have already broken through 2008 peaks. The exposure here runs wide: banks that originated the loans, ABS investors holding securitizations, landlords reliant on office income, and pensions that own slices of all of it.

Each of these risks alone would be manageable. What makes this moment different is how tightly interlocked they are. Households under pressure shrink tax bases for cities. Corporate and CRE stress flows straight to bank balance sheets. Pensions are exposed to all of it, just as the Treasury’s refinancing wall towers over the rest. And if history holds, a Fed easing cycle means unemployment will climb, magnifying every one of these pressures.

This isn’t just one sector at risk. It’s the entire credit ecosystem of households, cities, pensions, banks, and the federal government leveraged against itself. And almost no one is talking about it.
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