Additional rate hike could be needed if inflation stays high

[HarleyDog]

I wish these federal reserve members would shut up. They spook the markets. As someone who follows the markets every day, any time one of these Fed Members open their mouths, it affects the markets, even drastically at times. How much of this could be politically motivated? Not long ago, Powell had come out and said there could be 3 rate cuts this year. Now, a few weeks later we have Bowman stating we may see hikes.

I was watching Jim Cramer last night and he spouted off the same thing I am saying today, and that is that these fed members have to stop throwing personal opinions out into the media and wait until they have their meetings and then let Powell deliver the messages. 

I briefly looked at members of the Fed and it appears they are pretty evenly split on political party affiliation. This makes me question, is it politically motivated or is it another reflection of insider trading. Either way, I feel these members are inducing panic by throwing their words around. I see too much room for market corruption here, as if we don't have enough of that already.

Quote:Federal Reserve Governor Michelle Bowman said Friday that it’s possible interest rates may have to move higher to control inflation, rather than the cuts her fellow officials have indicated are likely and that the market is expecting.

Noting a number of potential upside risks to inflation, Bowman said policymakers need to be careful not to ease policy too quickly.

“While it is not my baseline outlook, I continue to see the risk that at a future meeting we may need to increase the policy rate further should progress on inflation stall or even reverse,” she said in prepared remarks for a speech to a group of Fed watchers in New York. “Reducing our policy rate too soon or too quickly could result in a rebound in inflation, requiring further future policy rate increases to return inflation to 2 percent over the longer run.”

As a member of the Board of Governors, Bowman is a permanent voting member of the rate-setting Federal Open Market Committee. Since taking office in late 2018, her public speeches have put her on the more hawkish side of the FOMC, meaning she favors a more aggressive posture toward containing inflation.

Bowman said her most likely outcome remains that “it will eventually become appropriate to lower” rates, though she noted that “we are still not yet at the point” of cutting as “I continue to see a number of upside risks to inflation.”

The speech, to the Shadow Open Market Committee, comes with markets on edge about the near-term future of Fed policy. Statements this week from multiple officials, including Chair Jerome Powell, have indicated a cautious approach to cutting rates. Atlanta Fed President Raphael Bostic, an FOMC voter, told CNBC he likely sees just one reduction this year, and Minneapolis Fed President Neel Kashkari indicated no cuts could happen if inflation does not decelerate further.

Futures traders are pricing in three cuts this year, though it has become a close call between June and July for when they start. FOMC members in March also penciled in three cuts this year, though one unidentified official in the “dot plot” indicated no decreases until 2026 and there was considerable dispersion otherwise about how aggressively the central bank would move.

“Given the risks and uncertainties regarding my economic outlook, I will continue to watch the data closely as I assess the appropriate path of monetary policy, and I will remain cautious in my approach to considering future changes in the stance of policy,” Bowman said.

Weighing inflation risks, she said that supply-side improvements that helped bring numbers down this year may not have the same impact going forward. Moreover, she cited geopolitical risks and fiscal stimulus as other upside hazards, along with stubbornly higher housing prices and labor market tightness.

“Inflation readings over the past two months suggest progress may be uneven or slower going forward, especially for core services,” Bowman said.

Fed officials will get their next look at inflation data Wednesday, when the Labor Department releases the March consumer price index report.

[Goalpost]

Totally agree. I think it's ego. Doesn't the 'Fed minutes', which are released after they meet, express their views for people to see....

To me, they are out of line.

[Belsnickel]

I wish I could say I cared.

[HarleyDog]

(04-05-2024, 04:14 PM)Goalpost Wrote: Totally agree.  I think it's ego.  Doesn't the 'Fed minutes', which are released after they meet, express their views for people to see....

To me, they are out of line.

Absolutely. The minutes is what Powell discusses after the end of each session. The minutes are a consensus of all members of the meeting, which should be the trusted source. Especially when political affiliations are different. The opinion of the body should weigh the market and not the individual. 

[Sociopathicsteelerfan]

I'd be buying a new car this year if interest rates were reasonable. I'll be damned if I'm going to pay 6.4% APR with my credit rating. Damned highway robbery.

[NATI BENGALS]

If we keep having blowout jobs reports, which we did today, which could be why she said that if that was comments from today. And inflation stays above their 2% target… We may very well see rate hikes. I don’t think there is anything political about it. They need to be allowed to do their job and not have to worry about partisan bullshit.

[HarleyDog]

(04-05-2024, 08:21 PM)Sociopathicsteelerfan Wrote: I'd be buying a new car this year if interest rates were reasonable.  I'll be damned if I'm going to pay 6.4% APR with my credit rating.  Damned highway robbery.

Yep, we bought my wife a new car a few years ago and she's ready for an upgrade. When we purchased, we got an interest rate of 4.5%. Checked into a new one and was shocked at what they were pushing. Bad thing, we both have great credit scores. I hate paying interest on anything which is why I try to buy things outright with cash if I can. I refuse to hand over free money. I'm glad she's in the same mindset.

(04-05-2024, 09:09 PM)NATI BENGALS Wrote: If we keep having blowout jobs reports, which we did today, which could be why she said that if that was comments from today. And inflation stays above their 2% target… We may very well see rate hikes. I don’t think there is anything political about it. They need to be allowed to do their job and not have to worry about partisan bullshit.

You would think. But like I said, it's an election year and Biden is claiming we have the best economy. We don't if inflation is still high enough to keep raising rates. All this means is our economy is out of control and people still can't afford to, or are struggling to live (overall). I'm not as quick to throw away the possibility that politics doesn't play a part of the market shaking. It's things like this that encourage people to distrust the market and rightfully so. If rates rise again, it's going to create even more strain on Americans. Doesn't bode well for POTUS chances of reelection. 

[SunsetBengal]

(04-05-2024, 09:09 PM)NATI BENGALS Wrote: If we keep having blowout jobs reports, which we did today, which could be why she said that if that was comments from today. And inflation stays above their 2% target… We may very well see rate hikes. I don’t think there is anything political about it. They need to be allowed to do their job and not have to worry about partisan bullshit.

Then perhaps they should devise a method of determining what damages the economy more, average citizens being able to purchase necessary things like automobiles and homes, or corporations being able to borrow billions to further expand their growth. Then, once they make that determination, devise a way to only impact the "big borrowers" rather than punishing the common families attempting to survive.

[GMDino]

I do love the conversation here suddenly wondering why lots of jobs and better pay is bad so interest rates go up, which is bad, to control the inflation which they also say is bad.

It's enjoyable.

Sidenote: Rates should have been raised long before and then dropped in 2020 but there was nowhere to go then.

[HarleyDog]

(04-05-2024, 10:46 PM)GMDino Wrote: I do love the conversation here suddenly wondering why lots of jobs and better pay is bad so interest rates go up, which is bad, to control the inflation which they also say is bad.

It's enjoyable.

Sidenote: Rates should have been raised long before and then dropped in 2020 but there was nowhere to go then.

Good Lord. 

[GMDino]

(04-05-2024, 11:02 PM)HarleyDog Wrote: Good Lord. 

They never should have been held at zero as long as they were.

[NATI BENGALS]

(04-05-2024, 11:15 PM)GMDino Wrote: They never should have been held at zero as long as they were.

Nope. And I’m strongly convinced that’s what broke the housing market. Bunch of big money players took advantage of low rates and started buying up properties. Plenty of competition from normal consumers mixed in too.

[NATI BENGALS]

(04-05-2024, 10:26 PM)SunsetBengal Wrote: Then perhaps they should devise a method of determining what damages the economy more, average citizens being able to purchase necessary things like automobiles and homes, or corporations being able to borrow billions to further expand their growth. Then, once they make that determination, devise a way to only impact the "big borrowers" rather than punishing the common families attempting to survive.

We talk about it. Corporations paying their fair share. But a certain political party is totally against it and does everything in their power to stop it. IMO it is necessary to offset the wealth disparity in this country before they price the low and middle class out of everything. People living paycheck to paycheck vs fat bank account just compounding and making money for having money.

Hint: it’s the party whose leader just got his bond posted by a guy who built a fortune as a used car salesman (the most noble, honest, and honorable profession imaginable) who did subprime loans.

Disclaimer: at one time I was a car salesman. Total Scumbags… and the subprime lending scheme… That was one of the main reasons I was glad to move on. Absolutely robbing the people who need help more than anyone. Dirtiest business I’ve ever been a part of and it was 100% legit.

[Mike M (the other one)]

Biden can just order them to seek permission from the DOJ before being allowed to speak to the media..... can't have all these people running around exercising their 1A rights and stirring up trouble for his re-elections chances.

[HarleyDog]

(04-05-2024, 11:15 PM)GMDino Wrote: They never should have been held at zero as long as they were.

Wait... But I thought the Fed was the one who raised interest rates. Powell was the chair during the Trump administration and remains during the Biden administration. You're blaming shit on Trump as usual. I don't believe the POTUS influences the Federal Reserve and its decisions. But, I could be wrong. I already know what your next post will be, so fire away.

But, but, but. Trump asked for the rates to stay low. Well, he can say whatever he wants but not his decision. 

[HarleyDog]

(04-06-2024, 12:32 AM)NATI BENGALS Wrote: We talk about it. Corporations paying their fair share. But a certain political party is totally against it and does everything in their power to stop it. IMO it is necessary to offset the wealth disparity in this country before they price the low and middle class out of everything. People living paycheck to paycheck vs fat bank account just compounding and making money for having money.

This POV wears me out. Corporations pay their taxes. They also donate a lot of money. They are a business. Their goal is to make money. They pay people to know the tax code and take advantage of every benefit allowed. Why do some people think this is bad? We all do it. Their job is to make money and provide jobs to people so they can make a living. Otherwise, they wouldn't be in it and then people would be bitching because there are no jobs.

This is not a jab at you so please don't take it that way. But I feel a lot of people just view companies as an endless source of cash. Reminds me of being a kid and my dad not having money to buy me something so I say, "Write a check!" It's a horrible way to live, always expecting someone else to pay. Pay for my college, pay for my groceries, pay for my kids, pay, pay, pay. As for my dad, he told me to go mow a lawn. 

IMO, every time we attack corporations, jobs are lost, prices increase, and more pressure is put on the government to take care of the unemployed. 

Quote:Disclaimer: at one time I was a car salesman. Total Scumbags… and the subprime lending scheme… That was one of the main reasons I was glad to move on. Absolutely robbing the people who need help more than anyone. Dirtiest business I’ve ever been a part of and it was 100% legit.

Dude. I was an insurance salesman at one time in my youth. I believed in what I was doing and my clients liked me because I told the truth. I didn't push products on people and try to get them to buy things they couldn't afford. I know the pressure some companies put on you to sell. Sometimes, it felt unethical and I refused to participate. I know how you felt. I only lasted a year, but I'm happy to say I walked away with a clear conscience. 

My wife hates car salesmen. So much so, that she won't let me pull into a car lot because she says as soon as you do, the salesmen come out like cockroaches trying to force a sale. I laughed the first time she said it. Then I pulled into a car lot and realized, that girl was right. She doesn't hesitate to remind me either whenever I mention going to a lot. HAHA.

[GMDino]

(04-06-2024, 11:21 PM)HarleyDog Wrote: Wait... But I thought the Fed was the one who raised interest rates. Powell was the chair during the Trump administration and remains during the Biden administration. You're blaming shit on Trump as usual. I don't believe the POTUS influences the Federal Reserve and its decisions. But, I could be wrong. I already know what your next post will be, so fire away.

But, but, but. Trump asked for the rates to stay low. Well, he can say whatever he wants but not his decision. 

You show me where I said "Trump" held the interest rates.  Go ahead.

He kept saying he wanted them lower than zero...but that is basically because he doesn't understand anything other than "me get better rates from banks...good".

Fortunately the Fed is able to maintain some sense of neutrality.  Some.

But I believe most people would say that the lower rates are used when the economy needs a push.  Higher rates to keep from it "overheating".

You're knee-jerk defense of Trump is funny though.

[Sociopathicsteelerfan]

(04-07-2024, 08:18 AM)GMDino Wrote: You show me where I said "Trump" held the interest rates.  Go ahead.

He kept saying he wanted them lower than zero...but that is basically because he doesn't understand anything other than "me get better rates from banks...good".

Fortunately the Fed is able to maintain some sense of neutrality.  Some.

But I believe most people would say that the lower rates are used when the economy needs a push.  Higher rates to keep from it "overheating".

You're knee-jerk defense of Trump is funny though.

Pointing out something is not Trump's fault, despite your assertions to the contrary, is not defending Trump, it's pointing out the truth.  Basic logic fail, and why you think everyone is a Trump supporter who doesn't froth at the mouth over everything he says and does.

[GMDino]

(04-07-2024, 11:37 AM)Sociopathicsteelerfan Wrote: Pointing out something is not Trump's fault, despite your assertions to the contrary, is not defending Trump, it's pointing out the truth.  Basic logic fail, and why you think everyone is a Trump supporter who doesn't froth at the mouth over everything he says and does.

Now there will be two of you saying that *I* said the low interest rates by the Fed were "Trump's fault".

Should take long to find proof that.

Also where did I say he was a Trump supporter?  I said he had knee-jerk to reaction and started defending him when I didn't say anything about him.

But please, continue telling me what I said. 

[Sociopathicsteelerfan]

(04-07-2024, 11:47 AM)GMDino Wrote: Now there will be two of you saying that *I* said the low interest rates by the Fed were "Trump's fault".

Should take long to find proof that.

Also where did I say he was a Trump supporter?  I said he had knee-jerk to reaction and started defending him when I didn't say anything about him.

But please, continue telling me what I said. 

You didn't directly, but I can see how Harley would believe you inferred it.  Especially when you followed it up with this.

(04-07-2024, 08:18 AM)GMDino Wrote: He kept saying he wanted them lower than zero...but that is basically because he doesn't understand anything other than "me get better rates from banks...good".

Fortunately the Fed is able to maintain some sense of neutrality.  Some.

Still not seeing it?  It certainly wouldn't shock me.


Also, are you now stating there is a difference between being a Trump defender and a Trump supporter?