The Federal Reserve has now announced that it will be engaging in a major change of direction in an attempt to tame rising inflation.
The Federal Reserve has now announced that it will be engaging in a major change of direction in an attempt to tame rising inflation.
The Details: Chairman Jay Powell Announced on Wednesday that the Federal Reserve would increasing the rate of its taper and is also expecting to enact at least three interest rate hikes in 2022 in the name of fighting inflation.
Why it Matters: The Consumer Price Index (CPI) showed its highest reading since the early 1980’s last week when inflation clocked in at a scorching 6.8 percent, leaving many observers calling for the Federal Reserve to take a tougher line with interest rates.
What People Are Saying:
Translation:They will try to raise rates by .25%,a 3-4 times but when they reach 1.25-2% level, markets will plunge & they will stop & reverse. QE will eventually return. Folks, keep an eye on REAL negative rates as inflation will guarantee big gap. https://t.co/OcIwmnNWiW
— Frank Giustra (@Frank_Giustra) December 16, 2021
In some ways, the bond market buys into the "inflation is transitory" story more than the Fed at this point. US 2-year yields are dipping, and the market is pricing in fewer rate hikes than Fed members are predicting. Inflation expectations over the next 5 & 10 years are falling.
— Lisa Abramowicz (@lisaabramowicz1) December 16, 2021
The FED is *FINALLY* addressing inflation w/the promise of rate hikes.
— Trish Regan (@trish_regan) December 16, 2021
Where the heck is BIDEN?
Oh yeah. Promising to print more money…to cause even MORE inflation…the build back better massive spending push. 🤦♀️