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. 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.
Click to expand...

www.federalreserve.gov

Federal Reserve issues FOMC statement

Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remaine
www.federalreserve.gov

Holding rates steady as expected. Slowing the pace of QT was (at least to me) unexpected.
 

Exclusive: Fed's Williams welcomes inflation data, not ready to seek rate cuts​

NEW YORK, May 16 (Reuters) - Federal Reserve Bank of New York President John Williams welcomed the arrival of softer consumer inflation data, he told Reuters, but said that positive news is not enough to call for the U.S. central bank to cut interest rates sometime soon.

While it is important not to overemphasize the latest economic news, the softer tone of April's Consumer Price Index is "kind of a positive development after a few months where the data were disappointing," Williams said in an interview with Reuters on Wednesday.

More:

 
Lulz:
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."
...
Click to expand...

More:

 
3o6Zt45jSpthw6NYHe.webp
 
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
 
Joe King said:
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
Click to expand...
Don't take what they said, at face value.

They knew better.

They were just trying to goose the market.

Stawk prices now are a function of ZIRP and QE. Buy with borrowed; hang on a short time, sell to a Greater Fool in two weeks, or six. Lather, rinse, repeat.

Now, the lie is becoming obvious.

This is the kind of scheisse that comes of disconnecting the cost of capital, from market forces, through reckless printing of fiat.
 

What the latest economic indicators mean for Fed rate cuts​

May 30, 2024

Stock futures (^DJI,^GSPC, ^IXIC) are in the red as investors digest this month's Gross Domestic Product (GDP) report, which fell below estimates. CFRA Research Chief Investment Strategist Sam Stovall joins Morning Brief to discuss how this GDP print could affect the Federal Reserve's next interest rate move.
Stovall notes that the GDP print is not nearly as important as the Personal Consumption Expenditures (CPE) report that will be released on Friday. The CPE print will provide a clearer picture of the impact of inflation on consumers, which Stovall adds is the most important factor as consumers make up about 70% of the overall economy.
He predicts the earliest rate cuts from the Fed could be in September, but it may be unlikely: "We have been saying for a while that we thought we'd get two cuts this year: September and December. But I would tend to say that we are becoming less confident about the start in September, so certainly a concern that investors have to deal with right now."


6:31
 
They held the line:
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.
...
Click to expand...

www.federalreserve.gov

Federal Reserve issues FOMC statement

Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have remained strong, and the unemployment rate has remaine
www.federalreserve.gov
 
The problem is government spending is so out of balance they have taken the tool of lowering rates away which is one of the reasons they raised rates to begin with.
 
Start your day with a laugh.

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."
...
Click to expand...


Fiscal doom loop it is then.
 

Fed Chair Powell says holding rates high for too long could jeopardize economic growth​

  • Federal Reserve Chair Jerome Powell on Tuesday expressed concern that holding interest rates too high for too long could jeopardize economic growth.
  • “Reducing policy restraint too late or too little could unduly weaken economic activity and employment,” Powell said in remarks for appearances this week on Capitol Hill.
Federal Reserve Chair Jerome Powell on Tuesday expressed concern that holding interest rates too high for too long could jeopardize economic growth.

Setting the stage for a two-day appearance on Capitol Hill this week, the central bank leader said the economy remains strong as does the labor market, despite some recent cooling. Powell cited some easing in inflation, which he said policymakers stay resolute in bringing down to their 2% goal.

“At the same time, in light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face,” he said in prepared remarks. “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.”

More:

 
ZIRP-QE-Infinity.

Or, until the dollar collapses...which will be, as things are, about eight months.
 
Fortune

Donald Trump told the Fed not to cut rates before the election—but Wall Street is convinced he won’t get his way​

September is seemingly the month Wall Street is pencilling in a cut to the base rate by the Fed—but former President Donald Trump won't be pleased.

In an interview with Bloomberg released last week, the current Republican presidential nominee attempted to quash any plans to cut the base rate ahead of the November elections.

"It’s something that they know they shouldn’t be doing,” Trump said of the politically independent, non-partisan organization.

The former TV star—having previously indicated he would oust chairman Jerome Powell—reversed his stance in the interview and said he would let Powell serve out the rest of his term “especially if I thought he was doing the right thing.”

Yet Wall Street, at least, seems certain Powell and his six colleagues on the Board of Governors are going to defy the Republican nominee.

Their confidence springs both from slowing economic data and from public remarks made by members of the board in recent weeks.

More:

 
I don't think a Fed rate cut at this point is going to move any needles on the political landscape for November. Trump assassination attempt and Biden dementia drama are likely dwarfing economic concerns for most voters.
 
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?
 
Joe King said:
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?
Click to expand...
Normal rates, to the Left, have nothing to do with markets.

Normal rates are determined by your POLITICAL STANDING. Good SJWs get Zero.

The Sheeple get rates dependent on their purchases. Solar panels, Zero. Bicycles, Zero. Normal, usable cars...no credit.

Likewise, MAGA types. Your Social-Credit is zero, ergo your FICO is zero.

And you can't have cash to buy things with. Because only criminals use cash - criminals LIKE YOU.

Starve, peon.



Suck it up - this is the wonderful Surveillance State they're building for us.
 
You must log in or register to reply here.
Back
Top Bottom