Quote:The Federal Reserve announced Wednesday it would raise its interest rate target by a quarter percentage point in an effort to curb soaring inflation, a major step away from its pandemic-era emergency policies.

Fed officials, as a group, also indicated that they expect seven or eight rate hikes over the course of 2022 — a much higher number than the three that were projected during the last quarter. One unnamed participant is pushing for up to a dozen rate hikes, according to Wednesday’s release. The urgency in raising rates is a reaction to the high rate of inflation, which officials now seeing running significantly higher over the course of 2022.

The Fed announced the move, which was thought by many economists to be overdue, after a much-anticipated two-day meeting of the Federal Open Market Committee. Inflation has been running much hotter than many had expected, with consumer prices reaching a breakneck 7.9% for the 12 months ending in February.

The spiraling inflation has signaled to the central bank that its efforts to boost spending in the wake of the pandemic were left in place too long. It also has damaged President Joe Biden's approval ratings and undercut his efforts to enact major spending measures.

The quarter-point hike, also known as a 25 basis point hike, was more modest than some economists had hoped for, with some advocating a full half percentage point increase, which would represent the central bank effectively enacting two rate hikes right out of the gate.

Complicating matters, and likely the driving force behind the Fed opting for the more modest hike, is the war in Ukraine, which generated tremendous uncertainty about global demand and supply chains.

Russia invaded Ukraine at the end of last month, and since then, markets have been in for a wild ride. By going with a smaller rate hike, the Fed and Chairman Jerome Powell are hoping to show some form of stability amid the chaos of the geopolitical situation. In fact, the markets have already been pricing in the quarter-point hike after Powell told Congress that he was contemplating the increase.

In a statement after the meeting, the FOMC said the implications of the Russian war in Ukraine for the U.S. economy “are highly uncertain,” but in the short term, the war and related events are likely to add upward pressure on inflation and weigh on economic activity.

The Fed has a narrow dual mandate: achieving maximum employment and maintaining price stability (keeping inflation in check). The Fed is now focused on tamping down inflation, given that the country’s employment situation has consistently improved since its trough during the start of the COVID-19 pandemic.


The economy again blew past expectations and added 678,000 jobs in February, an encouraging sign that the labor market is returning to its pre-pandemic strength. The unemployment rate ticked down to 3.8%, according to the Bureau of Labor Statistics, the lowest since the start of the pandemic.

Despite the gains, the country is still millions of jobs short of where it was right before the global health crisis took hold. Additionally, many employers have complained of a labor shortage and are struggling to hire and retain workers.

Link

Overdue, but at least they've started in the right direction.

Recession by the end of the year. I havent seen a Fed engineered "soft landing" scenario work yet.

Not meaningful. Won't do anything to significantly affect anything. But...it's a signal that the Fed is "addressing" inflation.

Don’t forget the preachers of “transitory”.

About flipping time.

And

another

prediction

comes

true.

We told you so.

Out-of-Control Deficit Spending Is Generational Theft

Quote:This week, President Biden is expected to sign the $1.5 trillion omnibus spending bill recently passed by Congress. Unfortunately, this means more deficit spending, trillions more added to the national debt, more wealth redistribution, additional power to the leviathan bureaucracy, and worst of all, more generational theft.

In FY 2022, the federal government is expected to rake in about $4.175 trillion in total revenue. Much of this windfall, 49 percent to be exact, will come in the form of personal income taxes, which should account for $2.039 trillion this year. The remaining $2 trillion will mostly come from payroll taxes and corporate income taxes.

However, that $4 trillion pales in comparison to the sheer amount of spending Washington, DC is preparing for in the year ahead. This year, the federal government expects to spend a little more than $6 trillion, which means we can expect another $2 trillion to be added to the $30.3 trillion (and growing) national debt.

To be fair, the majority of government spending goes to what many call “autopilot” programs. This refers to the roughly $4 trillion Uncle Sam doles out in Social Security, Medicare, and Medicaid annually. And, unless and until Congress passes a law reforming these programs, the spending will remain untouched.

Yet, that does not mean Congress is off the hook. After all, Congress does allocate every penny of discretionary spending, which is set to increase to $1.5 trillion after Biden signs Congress’ latest omnibus spending bill.

Remarkably, Congress has raised, yet again, non-defense spending. In years past, Congress has typically increased non-defense spending by 1 to 2 percent. But, this year, Congress decided to raise non-defense spending by a whopping 6.7 percent.

As Sen. Mike Braun (R-IN) recently lamented, “Only if you think that going from like asking for 15 percent increases down to seven or eight is a big concession. And historically, we’ve never done more than two or three recently.”

So, where is the huge increase in non-defense spending going?

According to the Committee for a Responsible Budget, every single subcommittee in Congress will see a big budgetary increase due to the Congress’ latest spending bonanza. For example, the Departments of Labor, Education, and Health and Human Services will receive a bump from $174 billion to $221 billion. The Departments of Transportation and Housing and Urban Development will receive $9 billion more, as well. And this comes on top of the $1.1 trillion “infrastructure” law passed late last year.

Across the board, federal agencies and departments are going to receive at least $200 billion more this year than last. No wonder the size and scope of the federal government continue to accelerate unabated.

But, this also means that future Americans will be footing the bill for today’s profligate spending. And, based on the present trajectory of the annual deficit and national debt, it could get very ugly very soon.

Per the national debt clock, as of today, the “debt per citizen” stands at $91,101. The debt per taxpayer stands at $241,661. Yet, just four years from now, the figures are estimated to jump to $135,671 and $345,490, respectively.

For context, in 2000, those numbers were only $20,343 and $55,404, respectively.

For far too long, Congress (whether Democrats or Republicans were in charge) has been derelict in their duty of appropriately controlling the nation’s purse strings. We have been digging this hole for decades. However, if we don’t stop digging soon, we could all be buried under the insurmountable weight of an unsustainable national debt.

This $1,500,000,000,000.00 spending spree-- with the help of runaway inflation-- is the left's deliberate attempt to crash our economy in order to move us to a social "credit" system, designed by the American left's counterparts in China.

Should be up a full percentage point since last Spring. .25 is basically nothing. Anyone that things the FED is not political is blind. Will have to be another .75 by Winter to have any effect.

(03-16-2022 01:46 PM)Attackcoog Wrote:  Recession by the end of the year. I havent seen a Fed engineered "soft landing" scenario work yet.

Yep, Jimmy Carter to the nth Biden = High inflation and High unemployment.

I saw where another 4 million quit their jobs in January knowing Uncle Joe will leave them on the welfare row for another year. Yet we are to believe that Unemployment is low when more workers were in the workforce in 2019 than today.