Quote:The Federal Reserve continued its campaign to tame inflation by approving a third consecutive three-quarters of a percentage point interest rate increase and signaling more hikes were likely coming at the two remaining monetary policy meetings this year.

Officials agreed Wednesday to lift the benchmark federal-funds rate to a range between three percent and 3.25 percent, the highest since 2008.

Investors had expected a 75 basis point raise, although markets indicated an outside chance of an even larger hike.

“Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,” the Federal Open Market Committee said in a unanimous statement released at the end of its two day meeting Wednesday.

Markets have rallied following each of the Fed’s interest rate announcements this year as investors decided time after time that Fed chair Jerome Powell appeared to be signaling a softer approach ahead. In a speech at a monetary policy conference in Jackson Hole, Wyoming last month, Powell appeared to convince markets that the Fed would be unwavering in its fight against inflation and would not cut rates next year even if the economy slumped significantly.

U.S. inflation began accelerating March 2021 as demand surged as the economy reopened and the Biden administration pushed through a new round of aggressive government stimulus. Fed officials initially mistook inflation as likely to be a brief episode linked to what they called “transitory” factors, such as disrupted supply chains and a lower labor force participation rate. Now Fed officials recognize that this was an error and have been frantically raising rates in hopes of preventing inflation from becoming more entrenched in the economy.

Core inflation, which excludes food and energy prices, has averaged 0.5 percent over the past 12 months, delivering a total price rise of 6.3 percent. Inflation appeared to moderate in July, with core prices rising just 0.3 percent. But that was short-lived. In August, core prices were up 0.6 percent.

At Jackson Hole, Powell said that the Fed’s tightening of financial conditions would likely inflict pain on households and businesses. The Fed sees the labor market as dangerously tight, with nearly two job vacancies for every unemployed person.

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Fed Officials Sharply Raise Their Forecasts of Rates and Unemployment, Downgrade GDP

Quote:The Federal Reserve officials sharply raised their expectations of interest rates, inflation, and unemployment, a summary of their economic forecasts showed Wednesday.

The median unemployment forecast of Fed officials at the September monetary policy meeting rose to 4.4 percent for next year, up from 3.9 percent at the July meeting. The forecast for 2024 was increased to 4.4 percent from 4.1 percent.

Inflation is now seen as running at 2.8 percent by the end of next year, up from 2.6 percent, and 2.3 percent the year after that, up from 2.2 percent. The figure for the end of this was revised up to 5.4 percent from 5.2 percent. In July, the most recent date available, the personal consumption price index—the Fed’s preferred measure of inflation—was up 6.3 percent.

Core PCE prices, which exclude food and energy prices, are now seen as rising at a 5.4 percent rate at the end of this year and 2.8 percent next year, up from June’s expectations for 5.2 percent this year and 2.6 percent next year.

Officials now see the Fed’s interest rate target at 4.4 percent by the end of this year, indicating an expected range of 4.25 percent to 4.5o percent. That is 125 basis points more in hikes at the next two meetings, apparently suggesting Fed officials see another 75 basis point hike followed by a 50 basis point hike. At the July meeting, Fed officials projected the target rate would rise to only 3.4 percent.

The expectation for next year jumped to 4.6 percent, higher than most private sector analyst estimates and well above the 3.6 percent rate foreseen in July. The following year, the rate target is seen as falling to 3.9 percent, up from 3.4 percent in June.

The Fed also sees much less economic growth this year. At the July meeting, Fed officials thought GDP would grow 1.7 percent this year. Now they expect just 0.2 percent growth. Next year’s growth is seen as just 1.2 percent, down from 1.7 percent, and the following year’s at 1.7 percent, down from 1.9 percent.

Thank you Joe Biden* for destroying the economy.

It’s transitory, nothing to see here

Biden voters can choke on a dick.

If you want a real laugh, go back one year ago and read what the Fed said would happen this year.

They predicted we'd have a Trump economy. We ended up with a Carter economy.

(09-21-2022 03:35 PM)200yrs2late Wrote:  Biden voters can choke on a dick.

We predicted it. Pedocrats are a disaster

Its funny--the Fed keeps saying its intends to aggressively fight inflation until they get it down to its 2% goal----and every time---within a week or two of that announcement---the market starts rising on optimism the Fed is almost done with tightening. Its like watching a battered wife keep returning to her abuser.

I'm sure the progressive morons will spin the Wall Street meltdown as hurting millionaires, never mind the middle class who have seen 401k balances drop 15% or more and the problems it may cause for pension funds.

As long as the ******* idiots keep passing damn spending bills and the retard in charge keeps signing executive orders with his poopy finger

They will have to continue. I see mortgage rates getting to 10-12% at this point. Literally Jimmy effin Carter.

Itll take a decade to climb out of this debacle.

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(09-21-2022 06:28 PM)maximus Wrote:  As long as the ******* idiots keep passing damn spending bills and the retard in charge keeps signing executive orders with his poopy finger

They will have to continue. I see mortgage rates getting to 10-12% at this point. Literally Jimmy effin Carter.

Itll take a decade to climb out of this debacle.

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Supposedly, the chart people are saying the fed rate has to roughly reach the inflation rate before inflation is typically tamed. That means the fed rate has a long way to go still. If the interest rate starts having an effect and inflation falls a bit----the Fed may not have to get all the way to 8%. For example, the inflation rate might begin falling so the Fed rate and the inflation rate could meet at say 6%. Apparently, it sounds like the current Fed expectation is they will only have to raise Fed rates to 4.6%---but I suspect thats overly optimistic. Back in 1981 the Fed had to raise the Fed rate as high as 13.7% (inflation was over 10% in 1981) before they finally got inflation under control and began easing.

(09-21-2022 06:28 PM)maximus Wrote:  As long as the ******* idiots keep passing damn spending bills and the retard in charge keeps signing executive orders with his poopy finger

They will have to continue. I see mortgage rates getting to 10-12% at this point. Literally Jimmy effin Carter.

It'll take a decade to climb out of this debacle.

If the GOP makes major gains in November (say, +4 in the Senate and +35 or more in the House), the healing process will be greatly accelerated. But if it’s just a status quo election, we’ll just get status quo results.

75 basis points...like Uncle Joes IQ.

The inflation rate will decrease once we get to the months that had the sharpest increases the previous year. Prices will still be high but the inflation rate will be low. We need negative inflation rates year over year to match payroll.

Over correction..... plain and simple