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Started By
Message
The dreaded “surprise” rate hike
Posted on 9/14/22 at 5:56 am
Posted on 9/14/22 at 5:56 am
What is the likelihood of an unscheduled rate increase now? Throw in a 50bp hike a few weeks after a 75bp hike next week. Or do they just go big and give a us a 100bp next week and call it a day?
They’ve done unscheduled rate cuts when the economy (GDP) tanks.
And they said they’d be proactive on this (yet they weren’t).
They’ve done unscheduled rate cuts when the economy (GDP) tanks.
And they said they’d be proactive on this (yet they weren’t).
10
Posted on 9/14/22 at 6:00 am to TDFreak
100bp is still a garden house on a sawmill fire
Posted on 9/14/22 at 7:11 am to TDFreak
I think they're just going to do 100s until inflation breaks. We might need 2 more of those to halt the current pressure.
(ETA: Unless another 100 does more than we think it will and, maybe a 50 or 75 is warranted as follow up. Frankly, I think it will be more like 2 more 100s and a 50/75 to settle things into a new normal. Won't be great for home buyers, but inflation has to be stopped, period.)
(ETA: Unless another 100 does more than we think it will and, maybe a 50 or 75 is warranted as follow up. Frankly, I think it will be more like 2 more 100s and a 50/75 to settle things into a new normal. Won't be great for home buyers, but inflation has to be stopped, period.)
This post was edited on 9/14/22 at 7:13 am
Posted on 9/14/22 at 7:15 am to TDFreak
Gut says 100 next.
Posted on 9/14/22 at 7:19 am to TDFreak
We will have a brutal recession and inflation. This is way beyond the Fed’s ability to control.
Posted on 9/14/22 at 7:30 am to SloaneRanger
quote:
We will have a brutal recession and inflation. This is way beyond the Fed’s ability to control.
It is the feds fault for misdiagnosing the situation and misprescribing the remedy for the past 2 years.
I blame political pressure (both parties) for castrating the feds ability to look at the big picture without a slanted take at combating inflation.
Posted on 9/14/22 at 7:54 am to meansonny
Negative, this is Congress fault for pumping out stimmy checks and free PPP money.
Once that money gets into m2 supply then it’s out of the Fed’s control.
Once that money gets into m2 supply then it’s out of the Fed’s control.
Posted on 9/14/22 at 8:04 am to meansonny
quote:
It is the feds fault for misdiagnosing the situation and misprescribing the remedy for the past 2 years.
I blame political pressure (both parties) for castrating the feds ability to look at the big picture without a slanted take at combating inflation.
Pretty much this.
The Fed should have been increasing rates in Q3 or at latest Q4 last year when inflation was clearly starting to run rampant, but political pressure or whatever you want to blame it on won out and we didnt see our first rate increases until March of this year when things were on a 40 year out of control cycle. For whatever reason we want to blame, the fed just didnt react when inflation was running 5-7% in the middle/late of last year which is double/triple what they want it to be. They waited until it was pouring over 8% to do anything.
This whole situation is not the feds fault, but all the "this is transitory" inflation we were hearing about last year everybody could see through.
This post was edited on 9/14/22 at 8:14 am
Posted on 9/14/22 at 8:37 am to TDFreak
It’ll be .75 for the next two meetings, then .5 or .25 - the severity doesn’t really matter all that much, it’s more about the terminal rate.
Headline inflation was up 0.1% in August after being flat in July. Even if it goes up 0.2% MoM, you’re going to be at 2.21% YoY by June 2023. We could he looking at YoY inflation numbers below the Fed funds rate by March.
Headline inflation was up 0.1% in August after being flat in July. Even if it goes up 0.2% MoM, you’re going to be at 2.21% YoY by June 2023. We could he looking at YoY inflation numbers below the Fed funds rate by March.
Posted on 9/14/22 at 8:42 am to TDFreak
Like 10 people still work
Everybody gets food stamps except me
Everybody gets food stamps except me
Posted on 9/14/22 at 9:57 am to TDFreak
My rates are all locked in and I don’t intend on buying anything anytime soon. I just hope and pray I don’t get laid off!
Posted on 9/14/22 at 10:46 am to thunderbird1100
quote:
This whole situation is not the feds fault, but all the "this is transitory" inflation we were hearing about last year everybody could see through
The transitory language should never have been taken seriously. And I don't think it generally was. A lot of the language from the fed shouldn't be taken seriously. It amounts to Monday morning coffee talk after getting blackout drunk on Saturday.
The recent discussion about learning more about inflation (or how little we know) was similar.
Really? We really didn't know pushing out three stimulus checks while reducing productivity would cause major inflation? Come on. No one would accept that nonsense from an economics major - let alone the fed chairman.
Posted on 9/14/22 at 10:46 am to el Gaucho
quote:I'll sell you some - I need my McD.
Everybody gets food stamps except me
Posted on 9/14/22 at 10:55 am to SloaneRanger
quote:they have the ability, but their reaction time is 24 months too slow
We will have a brutal recession and inflation. This is way beyond the Fed’s ability to control.
Posted on 9/14/22 at 11:07 am to molsusports
quote:
The recent discussion about learning more about inflation (or how little we know) was similar.
Really? We really didn't know pushing out three stimulus checks while reducing productivity would cause major inflation? Come on. No one would accept that nonsense from an economics major - let alone the fed chairman.
Exactly. They have over 400 PhD's on staff. Not a surprise.
They are in between a rock and a hard place trying to hang on here. They are not telling us everything they know. If they could get away with hiking faster, they would. They, as always, are kicking the can a far along as possible and now are even saying in not so many words, 'this is going to end badly'. I've never heard a Fed chairman use the words "expect" and "pain" together. I can't imagine a more clear signal to reduce risk.
Posted on 9/14/22 at 11:12 am to TDFreak
quote:
What is the likelihood of an unscheduled rate increase now?
I'm going with 0%, at least from now til the September meeting (I think we see a .75 increase from it).
They won't have the advanced numbers for October by their November meeting so if there is an emergency increase before the November meeting it will be because either the September numbers came in and were horrible and/or inflation noticeably increases over October. Otherwise, the only other reason I could see an emergency meeting would be if they did only a .5 in the November meeting and the October numbers come out and are far worse than they were expecting.
Posted on 9/14/22 at 11:34 am to molsusports
quote:
The transitory language should never have been taken seriously. And I don't think it generally was. A lot of the language from the fed shouldn't be taken seriously. It amounts to Monday morning coffee talk after getting blackout drunk on Saturday.
The recent discussion about learning more about inflation (or how little we know) was similar.
Really? We really didn't know pushing out three stimulus checks while reducing productivity would cause major inflation? Come on. No one would accept that nonsense from an economics major - let alone the fed chairman.
They should be fired. Honestly.
If you refuse to do your job...
If you are repeatedly on camera speaking to the public and you can't properly reference the current state of the economy...
If you are repeatedly on camera prescribing how you are leading monetary policy to navigate waters and nothing you do matters (per your own words)...
You should be fired.
I'm sick of it. There are too many apologists. 2+ years later, everything is public record and you failed.
Posted on 9/14/22 at 12:38 pm to meansonny
Garbage in. Garbage out.
They are and have been constrained by the elected officials and by inference the electorate.
There's a truism about the definition of a political gaffe is when a politician accidentally tells the truth.
They are and have been constrained by the elected officials and by inference the electorate.
There's a truism about the definition of a political gaffe is when a politician accidentally tells the truth.
Posted on 9/14/22 at 1:16 pm to Shepherd88
quote:
Negative, this is Congress fault for pumping out stimmy checks and free PPP money.
Bingo! It's almost as if we could look at historical records and realize giving out free money is a terrible idea.
Posted on 9/14/22 at 2:00 pm to j1897
quote:Yes.
giving out free money is a terrible idea.
But in this instance, "free money" is not basis of inflation (at least not yet). Strength of the USD speaks to the premise.
Inflation in this instance is secondary to supply reduction via supply-chain reduction. Shepherd88 referenced PPP money, aka stay-at-home-instead-of-returning-to-work payola. Insofar as PPP contributed to worker shortfalls, disrupting supply, he's correct.
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