Fed will overshoot rate increases

Welcome to the Precious Metals Bug Forums

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.

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!

searcher said:
Quarter point rate cut with 2 more coming this year.
Click to expand...
I wish he would have raised rates another .5. The real rate of inflation is between 8 and 10% according to shadow stats. Powell should be aggressively raising rates up to at least 8%. Yes this will kill real estate and employment for the short term but real estate is way over valued as are most US produced goods. A serious recession or even depression is severely needed right now to get rid of these bubbles in everything.
 
Cigarlover said:
A serious recession or even depression is severely needed right now to get rid of these bubbles in everything.
Click to expand...
If that happens, you'd might as well give the gov back to the dems right now. Because if that happens now, Trump will get the blame for it.

Even with his problems, he's better than the current alternative.
 
Cigarlover said:
I agree but Powell is supposed to be independent so he could blame Powell for doing the right thing and popping these bubbles.
Click to expand...
That's the problem. Powell has never really wanted to do that.

Waited far too long to start tightening, and took too long raising rates once he started.

He was/is trying to manage the bubbles, not pop them.

He's also on the side of the dems. Hence the rate cut two Months before the election.
 

Trump asks US Supreme Court to allow firing of Fed Governor Lisa Cook​

By Jan Wolfe

WASHINGTON (Reuters) -President Donald Trump's administration asked the U.S. Supreme Court on Thursday to let him move ahead with firing Federal Reserve Governor Lisa Cook - a move without precedent since the central bank's founding in 1913 - in a legal battle that imperils the Fed's independence.

The Justice Department asked the justices to lift U.S. District Judge Jia Cobb's September 9 order temporarily blocking the Republican president from removing Cook, an appointee of Democratic former President Joe Biden. Cobb ruled that Trump's claims that Cook committed mortgage fraud before taking office, which Cook denies, likely were not sufficient grounds for removal under the law that created the Fed.

More:

https://www.msn.com/en-us/news/us/t...vernor-lisa-cook/ar-AA1MPDe1?ocid=socialshare
 
I thought the Fed was private. How does any political official have authority over the Fed? Or am I mistaken? Can Trump fire an employee at my nearest Walmart?
 

The Rules Have Changed

Fed policy more typically focuses on one side of the mandate, then swings the opposite way when the goal seems achieved. Hence, the “punchbowl” analogy I described last week. Need more employment? Fill the punchbowl. Then drain it when inflation picks up.
goldseek.com
 

 

Supreme Court lets Fed Governor Lisa Cook keep job pending January oral argument​

  • The Supreme Court allowed Federal Reserve Governor Lisa Cook to remain in her post pending oral arguments in January on whether President Donald Trump has legal cause to fire her.
  • The court’s move is a blow to Trump, who has repeatedly and unsuccessfully asked federal courts to allow him to terminate Cook from the Fed’s Board of Governors without delay.
  • As a practical matter, Wednesday’s ruling allows the central bank to carry on with business at least through the end of the year, during which it is expected to approve two more interest rate cuts.
The Supreme Court on Wednesday allowed Federal Reserve Governor Lisa Cook to remain in her post pending oral arguments in January on whether President Donald Trump has legal cause to fire her.

The court’s move is a blow to Trump, who has repeatedly and unsuccessfully asked federal courts to allow him to terminate Cook from the Fed’s Board of Governors without delay while her lawsuit challenging her removal is pending.

Trump has cited claims that Cook committed mortgage fraud as his reason for firing her from the seven-member board.

More:

 
JPow speech today sounds like he's ready to end QT.
 
Too bad stonks haven't presumable asked the question why? He was asked a good question actually about how the price of Gold used to actually concern the FED and he couldn't have run faster from the question.
 
Voodoo said:
Too bad stonks haven't presumable asked the question why? He was asked a good question actually about how the price of Gold used to actually concern the FED and he couldn't have run faster from the question.
Click to expand...
Because he knows that they can't do anything about it. If they could, they would have by now.
 
searcher said:
Click to expand...
That's funny (I say, not hearing the snippet; I haven't had enough coffee to listen to another Trump clip).

Powell is a central banker, and thus in a criminal trade...times 2. Banking, and CENTRAL banking. But if anything, he's been the rarity - a (relatively) honest central banker, with some sense of obligation.

Tom Luongo has researched him - his roots go to the Mayflower; Luongo believes that, back to the wall, Powell is trying patriotism - preserving the dollar, versus The Regime. Hence his run-up to return the price of money, back to historical norms. Curb the malinvestment, make saving, great again.

That's not low intellect. The opposite - thinking zero-cost of borrowed capital, is right, proper and indefinitely sustainable, is a moron's view. Especially as we look around at 20 years of malinvestment - windmill farms and stock buybacks, just two examples.
 
If they try to save the dollar the economy will crash. Inflation is coming in dollar terms because of no political way around excess.government spending.

Choice #1: Default on USTs + haircut bank accounts + create new currency to counter eurodollars with tax for repatriation.

Choice #2: Cut taxes and inflate currency to make existing debt smaller.in ratio.
 

Here’s the inflation breakdown for September 2025 — in one chart​

  • The consumer price index rose 3% on an annual basis in September 2025.
  • Economists said the Trump administration’s tariff agenda could raise consumer prices more in the months ahead.
  • Without any other economic data, the report provides a look at the state of the U.S. economy ahead of next week’s Federal Reserve meeting.
Inflation edged higher in September amid a jump in gasoline prices and other essentials such as electricity, while President Donald Trump’s tariffs put pressure on prices for physical goods such as clothing and furniture, economists said.

The consumer price index, a key inflation barometer, rose 3% in September from a year earlier, the Bureau of Labor Statistics reported Friday. That’s an increase from 2.9% in August but below economists’ expectations.

More:

 

Federal Reserve issues FOMC statement

Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged
www.federalreserve.gov

Quarter point cut and ending QT on Dec. 1
 
Wrong way in my humble opinion, I rather see it at 5% till inflation under control...
 
Fatrat said:
Wrong way in my humble opinion, I rather see it at 5% till inflation under control...
Click to expand...
Inflation is what they WANT.

It's a Stealth Tax. And it's the only way to make the huge debt serviceable.

WHILE they grow it BIGGER.

This is a suicide spiral.
 

The latest Fed minutes read like another nail in the coffin for a December interest rate cut​

It’s looking increasingly likely that Jerome Powell’s Christmas gift to markets will be an economic lump of coal, rather than what’s on Wall Street’s wish list. Odds for a December cut to interest rates at the Federal Open Market Committee’s (FOMC) final meeting of the year are fading fast, despite hopes all year for one last reduction. At the time of writing, CME’s FedWatch barometer shows a 32% probability of a 25bps cut next month. That’s compared to a 98.9% conviction of a cut a month ago.

The general consensus is now for the Fed to keep rates hold, with the base rate sitting at 3.75% to 4%. This will likely infuriate the White House, which has been pushing throughout 2025 for significant reductions—with President Trump blaming “Too Late Powell” for a housing crisis in the U.S.

More:

https://www.msn.com/en-us/money/mar...nterest-rate-cut/ar-AA1QOjdQ?ocid=socialshare
 
Fatrat said:
Absolutely no valid reason for a rate cut...In fact, we need a full point rate hike. IMHO.
Click to expand...
For some reason, Powell is now giving Trump what he wants. It's as inexplicable as Trump giving the idiot play-soldier Goober Graham what HE wants.

But Trump's economic recipe is formulaic. Get the stonk market into dizzying new heights - and that means economic success.

The way to do that is, moar QE-ZIRP, letting Chase and others, again buy for their house accounts using Fed discount-window money. Buy, watch the indices launch, sell to repay a few days later, then reborrow.

Churning the market. It's how we GOT into this hellscape economy - and we won't get out until someone takes Orange Man aside and either talks sense into him or gets him out of the picture.
 
The problem is that rates weren't raised enough to begin with.

Powell should have raised rates substantially higher, and move sooner than he did in the run up to the 9% inflation rate.
.....but he didn't want to actually break the bidet's economy.

So no, the fed absolutely did not overshoot their rate hikes.

What the fed and Powell did was pretend to get tough on inflation.
 
Fatrat said:
Absolutely no valid reason for a rate cut...In fact, we need a full point rate hike. IMHO.
Click to expand...
You are correct if we were in a free market economy. It's a partially planned one.
 
searcher said:
Cut 0.25% today.

Another screwing of seniors / savers again.
Click to expand...
Who didn't see that coming.

We know what Trump is. Wait until he gets his Fed replacement in - he's probably double-screened, now, to be sure whoever it is, doesn't do a Powell and suddenly remember he's there to protect the soundness of the currency.
 

Fed chair candidate Hassett says U.S. is way behind the curve on lowering interest rates​

  • Top White House economic advisor Kevin Hassett said the Fed is not cutting interest rates quickly enough, even as the economy grew faster than expected in the third quarter.
  • Hassett is considered a leading contender to succeed Jerome Powell when the Fed chair’s term ends in May.
National Economic Council Director Kevin Hassett said Tuesday that the Federal Reserve is not cutting interest rates quickly enough, even though the U.S. economy grew at a much faster-than-expected pace in the third quarter.

Hassett, a leading contender to succeed Federal Reserve Chair Jerome Powell when his term ends in May, said the artificial intelligence boom is boosting economic growth while simultaneously putting downward pressure on inflation.

More:

 
WSJ

For years, Powell avoided fighting Trump. That’s over.​

For years, Federal Reserve Chair Jerome Powell has responded to President Trump’s broadsides in ways that generally avoided escalation.

That changed on Sunday night. In an extraordinary two-minute video message, Powell accused the administration of using the threat of criminal prosecution to pressure the Fed into lowering rates. He framed the Justice Department investigation as nothing less than a head-on challenge to the Fed’s ability to operate free of political control.

The subpoenas arrived late Friday. Powell, a lawyer by training, spent the weekend huddled with advisers, weighing how to respond. Powell made clear by releasing the video statement that he wasn’t going to let this play out in the shadows.

More:

https://www.msn.com/en-us/news/poli...rump-that-s-over/ar-AA1U2Q07?ocid=socialshare
 
Glad Powell is finally shooting back, with any luck, they both die...
 
Fatrat said:
Glad Powell is finally shooting back, with any luck, they both die...
Click to expand...
They obviously both will. Soon.

It's part of the problem of vesting so much power into these aged fossils. "The long term" to them is, next year. Most of them are out of the Political Elite class - and in the fashion of modern culture, coming out of the 1960s drugs-sex-rock-n-roll world...they care NOTHING for what happens to the next generation.

Tom Luongo has posited that Powell is an exception. His family tree runs to the Mayflower. He may be a Central Banker, but he's got something of a sense of responsibility for long-term outcomes. Which is why he insisted on moving interest rates into historically-normal ranges.

Trump probably picked him for the Fed-Head spot, because he made an articulate case. And because Trump is unduly influenced by the last person he talks to. So Powell made the case for ending ZIRP-QE, and in the moment, Trump bought it.

Now the MMT idiots have Trump's ear. And he doesn't have the information or experience to counter their propaganda. He was always on the borrowing side; he cannot understand the saver's role in the accumulation of capital. Probably, he believes moar of MMT than we'd like to think.

So now we're gonna get a Leftist stooge who thinks money and interest are political tools, and now the time is here to PRINT-BABY-PRINT! ZIRP! FREE MONEY FOR EVERYBODY! New junk cars for the Little People; and REIT holdings for the Masters Of The Universe!
 

Update

Fed Governor Lisa Cook seems safe from Trump firing after Supreme Court arguments​

  • Fed Governor Lisa Cook’s job seemed safe from firing by President Trump after Supreme Court justices skeptically questioned the Trump administration’s lawyers on Wednesday about the grounds for Cook’s would-be termination and its effect on the Fed’s historical independence.
  • The case could have long-term effects on the Fed’s independence in setting interest rates.
  • The arguments come less than two weeks after Fed Chair Jerome Powell disclosed he was under criminal investigation by the U.S. attorney’s office in Washington, D.C., over the central bank’s pricey building renovation project.
More:

 
You must log in or register to reply here.
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more…