patrick.net

AmericanKulak says

YEEHAH! Power to the savers!

Except nothing pays interest near inflation rate (save for measly $10K in I-bonds).

This fed rate hike is already baked into mortgage rates.

The government giving away free money by the thousands of billions caused inflation.
An economist would say it’s increased availability of money with no increase of output.
Biden and Putin got oil prices up.
Raising interest rates will have no effect on any of the above.

China;s construction boom has turned to bust. China's imports have simply imploded. This has put quite a damper on emerging market economies.

There is about $15 trillion in dollar denominated debt owed by foreign entities. With the expected 3/4 point raise today, that'll mean an extra $225 billion yearly they owe in interest from the beginning of the year.

Much of that debt will not be able to be rolled over. International bankruptcies will become commonplace.

There could be a global depression. That would certainly bring down oil prices.

https://finance.yahoo.com/news/gundlach-says-fed-raise-fed-032359738.html

Gundlach Says Fed Should Raise Rate to 3% on Wednesday

https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-june-2022-120337242.html

Federal Reserve set to announce interest rate decision at 2 p.m. ET

Too bad we can't do a poll on what they will do. If I had to guess I'm thinking 50 basis points, or less because they consistently do the wrong thing (with the right thing being a higher rate jack).

50 is what they had originally telegraphed. I think there is a good chance it will be 75 due to the continuing bad inflation numbers. They are being tasked with the challenging job of cleaning up the mess that they, Fauci and scarf lady, Trumpy and senile guy, and senile Congress have created.

https://www.cnbc.com/2022/06/15/heres-everything-the-fed-is-expected-to-announce-including-the-biggest-rate-hike-in-28-years.html

The Federal Reserve on Wednesday is expected to raise benchmark borrowing rates by three-quarters of a percentage point.

Up 75.

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.

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?

"Fed Hikes 75 Basis Points, Powell Says 75 or 50 Likely in July"https://www.bloomberg.com/news/articles/2022-06-15/fed-hikes-rates-75-basis-points-intensifying-inflation-fight?srnd=premium#xj4y7vzkg

zzyzzx says

Up 75.

ERECTION INTENSIFYING!!!

This was the realistically the best we could have hoped for.

... and all of a sudden nobody wants to borrow money ... except for those who know they are not going to repay it.

Ally Bank now up to 1% APY on it's savings account.

Booger says

Ally Bank now up to 1% APY on it's savings account.

WOW!!!! Savers getting RICH!!!

Where is my $100K McMansion. Bring it on MFs!

https://www.nytimes.com/2022/07/06/business/economy/fed-rate-increase-inflation.html

Fed Moves Toward Another Big Rate Increase as Inflation Lingers

There are only two choices under a central bank system. Inflate and gut the Federal Reserve debt notes, ultimately imploding the economy, or deflate, gut the stock market, ultimately imploding the economy. Ohh, I guess there's just one..

Shaman says

This isn’t going to fix inflation.
The supply chain must be fixed first.

While these may appear to be different problems, they are really the same. Inflation always, ALWAYS causes supply chain issues. Look at Venezuela, Weimer, or any previous example. Even simpler, these are symptoms of every society that employs a central bank.

NuttBoxer says

While these may appear to be different problems, they are really the same. Inflation always, ALWAYS causes supply chain issues.

Supply chain issues only in the context of demand.

QT, higher cost of borrowing can choke demand, supply chain issue problem solved by reduced demand.

Reminds me of when Volcker was appointed in the late 1970's. Yes, I was paying attention then.

100?

Inflation surges 9.1% in June, most since November 1981
https://finance.yahoo.com/news/june-cpi-preview-inflation-likely-surged-to-new-40-year-high-last-month-215233961.html

No way they do anything above 75 basis points, because like I mentioned above Expecting the federal reserve to do the right thing is just plain silly.

Al_Sharpton_for_President says

Inflation surges 9.1% in June, most since November 1981

The price of generic groceries has doubled within the last two years. If inflation was only 9%, prices should take 8 years to double.

B.A.C.A.H. says

Supply chain issues only in the context of demand.

Supply chain issues in the context of raw materials. Value is just a measurement of time. When the time and effort it takes me to get raw material that you need for your product out of the ground is being compensated with fiat paper that is losing value daily, at some point I'm gonna say fuck you and stop working for worthless paper. Since this happens at the source, it ripples all the way down the chain. There issues at other places, transporters will stop moving goods for same reason, consumers will stop buying non-essential goods, but this first one is the worst.

This isn't transitory, it's not caused just by Scamdemic's, and it didn't even start in the 70's. This IS the purpose of central banks, we are living their end result worldwide. So to expect the Creature to act contrary to it's nature and "fix" is farcical. Like I've been saying for a while, you want a better world, make it, no one else is going to do it for you.

https://www.bankofcanada.ca/2022/07/fad-press-release-2022-07-13/

Bank of Canada increases policy interest rate by 100 basis points, continues quantitative tightening

The Bank of Canada today increased its target for the overnight rate to 2½%, with the Bank Rate at 2¾% and the deposit rate at 2½%. The Bank is also continuing its policy of quantitative tightening (QT).

As someone that's kept a good hold on credit card debt, and with other loans at low fixed rates, I kind of want to see interest rates go way up before I buy a house. My monthly payment ability is fixed, so the higher the rates, the lower the home price needs to be. This is good, as perhaps rate will go down in later years, allowing me to refinance and lower payment.

Lower principle amount is more valuable to me than a lower interest rate when I'm buying.

exfatguy says

As someone that's kept a good hold on credit card debt, and with other loans at low fixed rates, I kind of want to see interest rates go way up before I buy a house. My monthly payment ability is fixed, so the higher the rates, the lower the home price needs to be. This is good, as perhaps rate will go down in later years, allowing me to refinance and lower payment.

Lower principle amount is more valuable to me than a lower interest rate when I'm buying.

Agree if all the turmoil drives prices down and isn't countered by inflation. Either way rates need to go much higher.

exfatguy says

As someone that's kept a good hold on credit card debt, and with other loans at low fixed rates, I kind of want to see interest rates go way up before I buy a house. My monthly payment ability is fixed, so the higher the rates, the lower the home price needs to be. This is good, as perhaps rate will go down in later years, allowing me to refinance and lower payment.

Lower principle amount is more valuable to me than a lower interest rate when I'm buying.

I've always believed the best time to buy is when rates are at their highest. I had a Realtor try to tell me that high rates cause inflation. Houses, over the last 20 years(?) have gone up in large part to the steady falling of rates.

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

Fed Could Weigh Historic 100 Basis-Point Hike After Inflation Scorcher.

Federal Reserve officials may debate a historic one percentage-point rate hike later this month after another searing inflation report piled pressure on the central bank to act.

https://finance.yahoo.com/news/fed-could-weigh-historic-100-145945366.html

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%