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Started By
Message
The Fed makes another .75 bump in interest rates
Posted on 7/27/22 at 1:48 pm
Posted on 7/27/22 at 1:48 pm
quote:
The Federal Reserve just increased its target federal funds rate to 2.25-2.50%.
quote:
This week’s increase marks the fourth interest rate increase this year, as the Fed works to temper runaway inflation rates, and a three-quarter percent jump from last month’s interest rate hike. Coming from pandemic-era lows near zero, the Fed’s latest decision makes for a total 2.25% increase since the start of this year.
The soft landing seems more like a upcoming crash
9
Posted on 7/27/22 at 1:49 pm to Jimmy2shoes
This is the most dovish speech I've heard in a long time. He is planting the seeds for a quick reversal once things begin to break in the next couple/few quarters
This post was edited on 7/27/22 at 1:50 pm
Posted on 7/27/22 at 1:52 pm to Jimmy2shoes
What are the thoughts about September? Do we see a .50 or a .75? Is 1 possible?
Posted on 7/27/22 at 1:57 pm to ronricks
are we seeing a little irrational exuberance in the market today?
Posted on 7/27/22 at 2:02 pm to Jimmy2shoes
Horrible presentation
Take the medicine now and get it done - this tip toeing around the problem will get us in worse shape that we currently are.
Take the medicine now and get it done - this tip toeing around the problem will get us in worse shape that we currently are.
Posted on 7/27/22 at 2:15 pm to Jimmy2shoes
It almost feels like this is where rates should be in normal times.
I do think inflation will start to stabilize, but it's going to take another point or two of rate hikes if they want to bring inflation back down.
I do think inflation will start to stabilize, but it's going to take another point or two of rate hikes if they want to bring inflation back down.
Posted on 7/27/22 at 2:22 pm to Jimmy2shoes
.75 bump in rates, but the market goes up.
Posted on 7/27/22 at 2:22 pm to Jimmy2shoes
they came across as super dovish with respect to future rate hikes, that's some bullish news if I have heard it
Posted on 7/27/22 at 2:27 pm to Auburn1968
quote:
.75 bump in rates, but the market goes up.
75 basis points was priced in, and some uncertainty that we may see 100 basis points was even priced in.
Add in the dovish posture with respect to the future, and the market is happy.
Posted on 7/27/22 at 2:38 pm to Ross
I realize this makes lending rates go up, but could somebody explain the exact reasoning behind why they are related.
Posted on 7/27/22 at 3:00 pm to Jimmy2shoes
Fed wants to convince people that inflation is over and pull the stock market up so that the Dems can win mid terms. Rather than accept reality and get the plunge over with
Posted on 7/27/22 at 3:05 pm to GeauxTigers123
The fed rate is basically what the Banks get for their deposits, thus all their profit making rates must go up because 0 risk is the fed lending rate.
IE, now banks can get .75% more than they could before for doing nothing and taking no risk, so thus doing something now increases or approaches an increase over time by .75% also.
It's way more intricate than that, but that's the basic idea.
IE, now banks can get .75% more than they could before for doing nothing and taking no risk, so thus doing something now increases or approaches an increase over time by .75% also.
It's way more intricate than that, but that's the basic idea.
This post was edited on 7/27/22 at 3:09 pm
Posted on 7/27/22 at 3:12 pm to Jimmy2shoes
They had a guy on CNBC this AM (can't find the video) stating that raising interest rates now with a promise to lower them in the near future will not do anything to resolve inflation.
Posted on 7/27/22 at 3:51 pm to Pendulum
quote:
The fed rate is basically what the Banks get for their deposits,
When you say “get” what do you mean? Like they loan out deposits right?
Posted on 7/27/22 at 3:51 pm to Ross
quote:
they came across as super dovish with respect to future rate hikes, that's some bullish news if I have heard it
Exactly. The market hates uncertainty and is sick of the Fed being pussies. Rip the bandaid off.
Posted on 7/27/22 at 4:01 pm to GeauxTigers123
quote:
When you say “get” what do you mean? Like they loan out deposits right?
Sort of.
Banks loan out money and charge a little interest to make some profit on that. Banks also have to keep a certain amount of money on-hand (meaning they can't loan out all of their money, this reserve limit is required by law). The Fed can help them out in maintaining their reserves by loaning them money at their rate (which is lower than what banks loan to you and I at).
This post was edited on 7/27/22 at 4:09 pm
Posted on 7/27/22 at 4:22 pm to GeauxTigers123
quote:
When you say “get” what do you mean? Like they loan out deposits right?
Fed funds rate is what the federal reserve pays banks to hold deposit on reserve. If a bank is getting 3% on their deposits at the fed, they’re not going to consider doing anything else with them unless the risk/reward is better than their 3% risk free rate they’re getting.
That being said, longer term rates like mortgages are not impacted quite as directly. For instance, the Fed has raises rates 1.5% in the last 5 weeks, and 10-yr treasury rates are actually down .75% over that time.
Posted on 7/27/22 at 5:20 pm to slackster
The Fed thinks they impact the long end of the Treasury curve about 10 bps 
Posted on 7/27/22 at 6:23 pm to Ross
quote:Yep. You can look at the bond markets too. They think the Fed is going to stop. I've been predicting doom for a year and I don't think its going to play out that way. Get out of the dollar, but don't listen to me with my track record.
they came across as super dovish with respect to future rate hikes, that's some bullish news if I have heard it
Posted on 7/28/22 at 6:35 am to Jimmy2shoes
All this hiking is designed to curb inflation by impacting consumer borrowing and spending
Has anyone here curbed their spending?
Has anyone here curbed their spending?
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