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re: Crystal ball $ gurus, where are rates going?
Posted on 4/9/24 at 8:18 pm to GREENHEAD22
Posted on 4/9/24 at 8:18 pm to GREENHEAD22
We will be lucky to see a rate cut this year.
The issue is that the consumers and the federal government are still creating money through ever-increasing debt. The previous hikes brought us down to just above 3% but the ongoing liquidity creation is not only keeping it from dropping below 3%, but it's started moving back up.
Refineries are just now getting into summer blends, those cost more to produce. OPEC is likely to keep production low at their next meeting so while the US is producing more than ever, oil has been trending upward. We're still below pre-COVID refining capacity so higher demand for gasoline as we get into summer months... all of this is why there's speculation of $4-$5/gallon national average for the summer (especially with no SPR to ease the burden).
If that happens, inflation jumps up.
All that said, it's looking more and more likely we'll get another hike before we get a cut. If inflation is up again for the next two readings, it wouldn't shock me to see another hike before September.
The issue is that the consumers and the federal government are still creating money through ever-increasing debt. The previous hikes brought us down to just above 3% but the ongoing liquidity creation is not only keeping it from dropping below 3%, but it's started moving back up.
Refineries are just now getting into summer blends, those cost more to produce. OPEC is likely to keep production low at their next meeting so while the US is producing more than ever, oil has been trending upward. We're still below pre-COVID refining capacity so higher demand for gasoline as we get into summer months... all of this is why there's speculation of $4-$5/gallon national average for the summer (especially with no SPR to ease the burden).
If that happens, inflation jumps up.
All that said, it's looking more and more likely we'll get another hike before we get a cut. If inflation is up again for the next two readings, it wouldn't shock me to see another hike before September.
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