patrick.net

Producer Price Inflation Unexpectedly Surges Back Near Record Highs In June.

https://ussanews.com/2022/07/14/producer-price-inflation-unexpectedly-surges-back-near-record-highs-in-june/

It’s almost ironic; raising interest rates will not accomplish anything except make things worse for the average guy. But, a good result will be the socialist loser Democrats will be blamed and lose in November, like 2010 all over again.

It couldn’t happen to worse bunch of assholes.

The people who are not prepared for this inflation are too young to remember the 70’s.

WineHorror1 says

I understand the Fed raised another .75 today but I haven't been able to confirm that.

Didn't happen.

clambo says

It’s almost ironic; raising interest rates will not accomplish anything except make things worse for the average guy. But, a good result will be the socialist loser Democrats will be blamed and lose in November, like 2010 all over again.

It couldn’t happen to worse bunch of assholes.

The people who are not prepared for this inflation are too young to remember the 70’s.

Are you trying to say Paul Volcker did the wrong thing?

July Fed Meeting Preview: Markets Expect Another Big Rate Hike.

Markets expect the Federal Open Market Committee (FOMC) to deliver another aggressive rate hike at its upcoming meeting on July 26-27. The Federal Reserve‘s 75 bps rate hike in June to 1.5% to 1.75% was its largest since 1994.

The FOMC will likely make its second consecutive 75 basis point (bps) rate increase and continue to allow assets to roll off its nearly $9 trillion balance sheet as it attempts to lower inflation without sending the U.S. economy into a recession.

The S&P 500 is down more than 20% year to date, thanks to growing concerns that the Fed will not achieve a “soft landing” for the economy.

On July 5, the yield on 2-year U.S. Treasury notes jumped above the yields on 10-year Treasury notes, a phenomenon known as a yield curve inversion. More than two-thirds of past yield curve inversions have been followed by U.S. recessions within the following year.

Another 75 bps Rate Hike Is Expected in July
The bond market is currently pricing about a 90% chance of another 75 bps rate hike at the July Fed meeting. According to the CME Group, there’s roughly a 9% chance of a 100 bps rate hike.

A second consecutive 75 bps Fed interest rate increase would increase the federal funds rate range to between 2.25% and 2.5%.

The bond market is pricing in an 83.4% chance the target rate range will climb to between 3.25% and 3.5% or higher by the end of 2022.

The FOMC is also expected to continue its plan to allow up to $30 billion in Treasury securities and $17.5 billion in agency mortgage-backed securities (MBS) to mature and roll off its monthly balance sheet.

Starting in September, the Fed plans to ramp its monthly roll-off to $60 billion in Treasurys and $35 billion in MBS per month.

In June, the Fed updated its long-term U.S. economic projections to reflect its less rosy outlook for GDP growth and inflation. The Fed cut its 2022 GDP growth estimate from 2.8% to 1.7% and its 2023 GDP growth estimate from 2.2% to 1.7%.

https://www.nasdaq.com/articles/july-fed-meeting-preview%3A-markets-expect-another-big-rate-hike

From 2010 2016 the Fed Funds rate was 0.25%. It last peaked around 3% back in late 2018.

It's now around 1.75%.

I suspect this week that Fed will raise it another 0.75%. That is what Wall Street is expecting.

I think the Fed wants to raise it to around 3.5% to 4% in order to give it enough margin to lower rates again without having to drop them below 1.5%.

.

Al_Sharpton_for_President says

I have to say the Wizard Oz was a freaking awesome film. Didn't appreciate it as a kid since it was on television EVERY Thanksgiving, but that was one trippy crazy film.

https://finance.yahoo.com/news/federal-reserve-interest-rates-fomc-monetary-policy-decision-july-2022-140540265.html

Federal Reserve raises interest rates by 0.75%

zzyzzx says

https://finance.yahoo.com/news/federal-reserve-interest-rates-fomc-monetary-policy-decision-july-2022-140540265.html

Federal Reserve raises interest rates by 0.75%

Not enough.

https://www.foxbusiness.com/economy/jpmorgan-forecasts-another-super-sized-rate-hike-fed-september.amp

JPMorgan forecasts another super-sized rate hike by the Fed in September

Booger says

JPMorgan forecasts another super-sized rate hike by the Fed in September

Not soon enough.

https://finance.yahoo.com/news/federal-reserve-powell-speech-jackson-hole-2022-140010694.html

Fed Chair Powell: Rates will rise until 'job is done' bringing down inflation

Powell said more rate hikes will be needed, with “another unusually large” increase still on the table for the Fed’s next meeting in September. The Fed chair reiterated that “at some point,” the Fed will move to slow the pace of its price increases.

I will believe it when I see it.. Stock market not liking talk of rate normalization today.

I thought Biden said inflation was 0.

GNL says

Shaman says

This isn’t going to fix inflation.
The supply chain must be fixed first.
I still can’t get parts or components or even freaking grease without a huge wait. That means we pay whatever it takes to get what we need to keep operating.
Which drives prices up.

What industry are you in?

Trans-ocean shipping.

https://finance.yahoo.com/news/fed-likely-hike-100-bps-180115275.html

Reuters Fed likely to hike by 100 bps in September -Nomura

ERECTION INTENSFYING!!!

zzyzzx says

Reuters Fed likely to hike by 100 bps in September -Nomura

Not enough.

1% won't do shit to stop this train-wreck. Don't write 75 or 100, it's bullshit jargon to make it look like they're doing something more than they are.

If they raise rates, stocks tank, and the economy goes under. If lower rates, the train wreck gains speed, stocks implode, and the economy goes under.

Did any one remember Austin power, guy has no clue millions vs billions difference so does the Biden and rest of the clowns force people be in houses to cover up stuff including stealing public money under fake medicine while printing $T as if they were $B. Now people have to face consequences in the form of higher inflation. It cannot take too long to see inflation affect in asset prices.

100. Wednesday at 2 p.m. ET.

NuttBoxer says

1% won't do shit to stop this train-wreck. Don't write 75 or 100, it's bullshit jargon to make it look like they're doing something more than they are.

If they raise rates, stocks tank, and the economy goes under. If lower rates, the train wreck gains speed, stocks implode, and the economy goes under.

You’re right. Either way the economy gets it. I think they’re trying to tank top economy (which has proven resilient so far) as a tactic to get inflation under control. I think they’ll just create stagflation with this method. Especially if they raise rates too much.
The housing market is already in the toilet for most places. Home builders are stopping building homes, even though a housing shortage exists.
Imports from China are way down right now, indicating much less consumerism going on. People are tightening their belts and ending the purchasing party they’ve engaged in for the last few years.

I’m not sure if unemployment will become significantly worse. There are too many infilled jobs and too many people are dying suddenly. As that escalates, and the jab becomes more deadly, able bodied workers are going to be at a premium.

So my prediction is that we will have high interest rates, low consumption, a tight labor market, and stocks won’t do well. It’s hard to see a bright future when investment in new projects has dried up and everyone is in survival mode, even if the healthy ones still have jobs.
Inflation will continue until the jab deaths really begin to be noticed on a grand scale. Then it will disappear as people discover their inescapable plight.

Shaman says

Especially if they raise rates too much.

I don't think that we have to worry about that.

https://www.cnbc.com/2022/09/20/fed-should-hike-interest-rate-rates-150-basis-points-wells-fargo.html

‘Rip off the Band-Aid’: Wells Fargo makes case for 150 basis point hike at Fed meeting

Still weak!

They are loosing control.

It's 75

zzyzzx says

It's 75

Wimps.

I am saying a major downturn in tourism in the Florida panhandle.

I have not seen it this quiet before, even with gas prices lowered (due to artifical means by Biden drawing down the emergency reserves).

.

Al_Sharpton_for_President says

Wimps.

I see the Fed raising the Fed Funds rate from 3.25% to 4% next November. I see them holding the rate steady between 4 and 5% in 2023.

.

ad says

I have not seen it this quiet before

Are you adjusting for seasonality?

ad says

I am saying a major downturn in tourism in the Florida panhandle.

I have not seen it this quiet before, even with gas prices lowered (due to artifical means by Biden drawing down the emergency reserves).

.

Same thing in San Diego. Tourism was dead this summer. Bills are coming due and low season has arrived. There's not going to be much for Christmas economy.

I am listening to Powell on Bloomberg Radio (WBBR).

Powell is saying American businesses have to feel pain so prices including wages come down.

He said wages will go down a lot less relative to inflation decreasing, so there will be a net positive effect to the working class.

We need more productivity gains such as from innovation. Hopefully businesses will feel more incentive to promote productivity gains.

The Fed raised the rate by 0.75% as expected to 3.25%. This is the highest the rate has been since 2007. The Fed indicated the rate will likely be around 4.25% by end of this year.

Notice Obama had almost 0% rate for almost all his Presidency, yet annual growth averaged only about 1.8% during his two terms :-/

NuttBoxer says

B.A.C.A.H. says

Supply chain issues only in the context of demand.

Supply chain issues in the context of raw materials

Ahem, that issue will be fixed by demand destruction from higher prices.

It's all about demand.

The 1st quarter of the year had a negative GDP print, the 2nd quarter of the year had a negative GDP print and the GDP NOW forecast from the Atlantic Fed has the 3rd quarter GDP rising .3% on an annualized basis (with more bad economic reports coming before the end of the quarter).

Employment measures are only increasing because several hundreds of thousands of Americans had to get second jobs.

Sure....go ahead hike rates when the US is already in a recession ... what could possibly go wrong ??????

Misc says

Sure....go ahead hike rates when the US is already in a recession

Are you a ®ealtor?

Just asking.

B.A.C.A.H. says

Misc says

Sure....go ahead hike rates when the US is already in a recession

Are you a ®ealtor?

Just asking.

Nope. Just sitting this one out with a bag of popcorn watching the government make one mistake after another.

Misc says

Sure....go ahead hike rates when the US is already in a recession

When I listened to Powel on WBBR, he said that 2% CPI was what was guiding the Fed's interest rate actions.

They have a long way to go but I still think the September 2022 CPI report will report between 4% and 6%.

Powell said businesses will have to expect pain and it won't be a soft landing.

.

S&P 500 closed down 21.3% below its 52 week and all time high of 4818 :-/

The Shiller PE ratio is 28 and PE ratio (trailing 12 months) is 19

Put to Call ratio is down slightly to 0.95 but well above the historic media of 0.7.

CNN Fear and Greed Index or Investor Index shows a score of 31 out of 100, which is near the extreme fear region.

https://www.cnn.com/markets/fear-and-greed

,

zzyzzx says

It's 75

Too little to control inflation. Raising too high can’t be possible as well as the gov can’t pay interest payment on massive debt.

Blue says

Too little to control inflation. Raising too high can’t be possible as well as the gov can’t pay interest payment on massive debt.

.



.
Yes, that's the conundrum as future debt will be financed at a higher rate. Look at how now the 10 Year US Treasury is at its highest since 2007, since the Fed Funds rate is at its highest since 2007.

Its a delicate or sensitive optimization effort as Jerome Powell said the primary goal is 2% annual inflation or CPI.

I wonder how the Debt to GDP ratio will fare. It was about 105% just before the pandemic and was above 99% from 2012. It peaked to 135% and now is around 120%.

.

ad says

I wonder how the Debt to GDP ratio will fare.

Trump suggested that doing a haircut on the debt could help with this. Seems like he was a master of this sort of thing with his serial bankruptcies.

This low-probably but blockbuster risk is the reason I never went out more than two years on the treasuries.