better line your bunker because Quantitative Tightening isn't going away even if the Fed stops raising on the short end.
OT: Stock and Investment Thread
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Hope you bears didn't have too much money in bonds:
Makes sense. The Fed will have to clean up the mess they created. This means rate cuts and QE. Bring it!
Jobless claims pop this week. I guess this is good news for the Fed and their efforts to get people laid off for the holiday season?
I know this is the internet but why does everything have to be "disaster", "line your bunker" and "ww3"?
It's not. This is just a typical bear market. Based on meeting notes, the Fed's stomach for large increases is already cracking. The voices for wait and see are growing stronger. One more good CPI report will cause a complete pause.
And this is with the current feds fund rate at 3.8%. Ie, still fairly low historically.
Rates needed to go higher, probably still need to go a little higher yet, but in the grand scheme nothing is too out of whack.
This run of inflation has thus far been fairly tame compared to the 70's or post WW2.
And most of this inflation was due to COVID, shutdowns, gov overspending, and Russia. Much of all this is resolved.
And a big part of inflation right now is the economies need for workers, which isn't exactly the worst thing in the world.
And population numbers might make that a permanent issue
Unless we are willing to substantially increase immigration
but that is ok, the fed balance sheet and other measures are fine and won't create the type of FX and rates dislocations that near double digit fed rate would.
Well yeah that would make sense.
But first I think we would like to get some of those not in the work force actually into the work force.
Not sure if that is an unsaid part of the immigration debate.
population argument doesn't hold water and is countered by allocation of resources approach to business. The pillars of any economy is the engine that drives it and when you increase those cost by 50% then you will see inflation. This isn't rocket science here. Compound stupid policy decisions with the ridiculous approach to the chinese flu and you are where we are.
you hit inflation at its drivers
still amazed the fed hasn't hit at revolving credit but instead opts to tell employers to stop giving raises. mind boggling
you hit inflation at its drivers
still amazed the fed hasn't hit at revolving credit but instead opts to tell employers to stop giving raises. mind boggling
Yes, child/elder care is the next big thing the Dems can try to tackle (with any non-MAGA GOP House members). It is impacting work force participation. MAGA folks are out to lunch.
lol, zero wrong with wanting to 'make America great again'
that said, child and elder care is not the venue for gov't as many companies provide these services as part of a package. On top of that, take care of your own damn family as I've got my own to worry about. Get a grip, stop trying to spend mine and other people's money. Gov't already provides plenty of services
Don’t most families sign up for the day care program where the money is withheld from your salary and reduces your taxable income?
And this was BEFORE the last CPI report. Plan accordingly.
'Substantial majority' of Fed officials see slowdown in rate hikes 'soon'
WASHINGTON (Reuters) - A "substantial majority" of policymakers at the Federal Reserve's meeting early this month agreed it would "likely soon be appropriate" to slow the pace of interest rate hikes as debate broadened over the implications of the U.S. central bank's rapid tightening of monetary policy, according to the minutes from the session.
The readout of the Nov. 1-2 meeting, at which the Fed raised its policy rate by three-quarters of a percentage point for the fourth straight time, showed officials were largely satisfied they could move rates in smaller, more deliberate steps as the economy adjusted to more expensive credit and concerns about "overshooting" seemed to increase.
"A slower pace ... would better allow the (Federal Open Market) Committee to assess progress toward its goals of maximum employment and price stability," said the minutes, which were released on Wednesday. "The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited."
'Substantial majority' of Fed officials see slowdown in rate hikes 'soon'
WASHINGTON (Reuters) - A "substantial majority" of policymakers at the Federal Reserve's meeting early this month agreed it would "likely soon be appropriate" to slow the pace of interest rate hikes as debate broadened over the implications of the U.S. central bank's rapid tightening of monetary policy, according to the minutes from the session.
The readout of the Nov. 1-2 meeting, at which the Fed raised its policy rate by three-quarters of a percentage point for the fourth straight time, showed officials were largely satisfied they could move rates in smaller, more deliberate steps as the economy adjusted to more expensive credit and concerns about "overshooting" seemed to increase.
"A slower pace ... would better allow the (Federal Open Market) Committee to assess progress toward its goals of maximum employment and price stability," said the minutes, which were released on Wednesday. "The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited."
I think there is little doubt we are getting near the end of hikes.
The question then becomes, how does the economy fair on the other side of that?
All signs point to the economy being fine (unless the Feds go wacko and keep jacking). However, if that happens, you will see a political intervention to stop them.
Given the job market I agree. People are working, wages are up (though not completely in line with inflation) and plenty of jobs still out there. We are seeing layoffs, but there are jobs out there for those people.
Though I wouldn't be shocked to see, if the economy over performs, after an initial pause, continued, more moderate rate hikes in late 2023 or 2024.
I don't see that scenario as a bad thing.
Definitely no rate hikes in 2024.....presidential election year. Just don't cut rates back to zero'ish. Perhaps settle in around 2% and hold.
If the Fed tries to hold between 4% and 5%, they will quickly need to cut substantially and begin QE, if you get my point.
I would not go that far to say all signs point to econ being fine, quite the opposite. We have negative savings rates, highest consumer revolving debt ever, highest auto loan defaults in 30+ years, receding home prices, 401k balances that are much lower than 1yr ago (proven wealth effect on consumer spending here), rising unemployment and a Fed that still MUST reduce it's balance sheet, banks are tightening lending restrictions and adding to capital reserve requirements, global imbalances due to local taxes, regulations, left wing politics, and fx which is going to deepen the issues for trade.
I could see the bond mkt rebounding with stocks staying range bound while conditions deteriorate.
Holiday spending will be interesting as all signs point to lower sales
This is what I do on my days off.Give thanks. Take a day off.
how much do you guys want to bet that the gov't moves to regulate non primary residence purchases by buying groups, llcs, and corporations? I see this coming
Nah. Between 1970 and 2000, the fed funds rate only dipped below 5% for a couple years in the early 90's. Got no where near 2%. 2% is a level you should be at when the economy needs juicing. A healthy economy should have higher rates.
Won't happen in the next 2 years that's for sure.
Beyond that? Maybe not such a bad idea.
If you think Wall Street and pols will be satisfied with 0.5% to 1.0% GDP growth, go for it.
#notgonnahappen
But your assumption is you can't have growth with 5% rates. See the 80's for an example to the contrary. And do note that followed a high inflation run as well.
possibly and you are right on their love there. Perhaps an opportunity for the reps?
Yeah, but that economic growth came AFTER massive interest rate cuts. From 20% down to 5%. The economy was being brutally suppressed by the Fed for so long. It's not just about where you are, but also where you came from.
I doubt they touch this issue. Nobody realizes its going on and its helped raise the price of homes for now.
Politicians in general like when $$ and power are consolidated. Bigger donors, easier to control, etc.