Of course, the actual uberdove Powell FED is worrying about a 0.75% hike that's one-tenth the size currently required simply to move real rates to neutral
excellent article - the fed has one mandate now - inflate the price of crude oil, gasoline and natural gas to help accelerate the great reset - they let the greenspan put expire
"First, leading democracies should agree to end the underpricing of fossil fuels, which is the principal factor preventing a clean energy transition. The underpricing associated with producing and burning coal, oil and gas amounted to $5.9 trillion in economic costs in 2020. Nearly a quarter of these losses – $1.45 trillion – occurred in 48 major and smaller democracies." - WEF article "Transitioning to green energy is key to both tackling climate change and creating sustainable economies. Here's why"
Excellent as usual. If inflation exceeds the Fed rate, money is free (or borrowing produces a guaranteed real return). Massively inflationary to have a negative 7.5% real Fed rate. The stock market understands this full well, which is why it went up after the 9.1% CPI print. Also, it is absolutely scandalous that the Fed is blatantly leaking to the media what it plans to do. First 0.5%, then 0.75%, then 1%, then back to 0.75%. With the media reporting the “expected” rate changing day by day as the Fed honchos keep changing their minds. With the changes suspiciously timed to boost the stock market when it falls. Forget about the Plunge Protection Team. The Fed has single handedly arrogated to itself the power to protect the stock market at all costs, at the expense of the 99% suffering from inflation.
On an other note: Booth, Wang both are from FED/WS world so they give the Fed and the people in and around it the benefit of the doubt. Maybe they are right, and it will all adjust in the end. I, and I assume you all, have NO ILLUSIONS that they would gas light us for as long as they could. Otherwise I want to see the "books"! Let me do the adding...cuz I don't trust their math skilz!
The Fed ignores their own "Rules of Monetary Policy" which includes an array of Fed Fund levels, most of which are sharply higher than current.
It is time for the Fed to have hard formula driven "guard rails".....the misread of "transitory" and the feet dragging should never happen again.
IF the inflation was "transitory", then any required rate rise could have been "transitory" as well. And if the inflation was not "transitory", then the immediate rate hike called for by formula would have been prompt and effective.
Money supply must also be formula driven, and only increase from a "pull" from an expanding economy.
In a system that boasts of "checks and balances", WHO CHECKS THE FED?
Some say “Abolish the Fed.” I think this overstates it. They do many things. But why do we need the Fed to control interest rates at their discretion? What you suggest might be a thoughtful way to handle it, as opposed to going full free market to set interest rates.
Just to provide background if anyone reads this who is not familiar. The Fed has controlled short rates for decades. Long rates used to have a measure of independence. But the Fed didn’t like that and recently began to largely control long rates with QE. That’s treasury rates. But corporate bond rates follow treasury rates pretty closely with a spread that doesn’t seem to move much, at least lately. And the treasury bond market is bigger than the corporate bond market. In short, the ham hand of the Fed has subverted the invisible hand of the free market in recent years.
JPOW said the Fed rate is now at neutral. Liar, liar, pants on fire! The stock market knows he is lying for their benefit and it bounds up. With inflation at 9.1% and the Fed rate at 2.25%, it’s so far below neutral it is in a figurative hell.
In December of 2018 when he was in the last "inning" of acting responsible as Fed Chair, inflation was 2% and Fed Funds were 2%. He referred to this as neutral.
Now, with inflation at 9% and Fed Funds at 2.25, he refers to this as "neutral".
The absurdity is tough to swallow. Maybe Nick from the WSJ can ask him about the word games. Fedspeak is not far from the "word salad" of VP Harris.
JPOW now says “transitory” wasn’t the right word. Two years from now, he will say “neutral” wasn’t the right word. But he actually knows when he says them that those are exactly the right words to accomplish his goal, which is to boost the stock market. Inflation? Who cares? Those are the little people. The 99%.
excellent article - the fed has one mandate now - inflate the price of crude oil, gasoline and natural gas to help accelerate the great reset - they let the greenspan put expire
"First, leading democracies should agree to end the underpricing of fossil fuels, which is the principal factor preventing a clean energy transition. The underpricing associated with producing and burning coal, oil and gas amounted to $5.9 trillion in economic costs in 2020. Nearly a quarter of these losses – $1.45 trillion – occurred in 48 major and smaller democracies." - WEF article "Transitioning to green energy is key to both tackling climate change and creating sustainable economies. Here's why"
Excellent as usual. If inflation exceeds the Fed rate, money is free (or borrowing produces a guaranteed real return). Massively inflationary to have a negative 7.5% real Fed rate. The stock market understands this full well, which is why it went up after the 9.1% CPI print. Also, it is absolutely scandalous that the Fed is blatantly leaking to the media what it plans to do. First 0.5%, then 0.75%, then 1%, then back to 0.75%. With the media reporting the “expected” rate changing day by day as the Fed honchos keep changing their minds. With the changes suspiciously timed to boost the stock market when it falls. Forget about the Plunge Protection Team. The Fed has single handedly arrogated to itself the power to protect the stock market at all costs, at the expense of the 99% suffering from inflation.
Great stuff as always brother! 🙏🏻🙌🏻
☕✝️
It's new math buddy: 2 + 2 = 5 ! You all did not get the memo? Think otherwise, bigot...I mean fascist!
On an other note: Booth, Wang both are from FED/WS world so they give the Fed and the people in and around it the benefit of the doubt. Maybe they are right, and it will all adjust in the end. I, and I assume you all, have NO ILLUSIONS that they would gas light us for as long as they could. Otherwise I want to see the "books"! Let me do the adding...cuz I don't trust their math skilz!
The Fed ignores their own "Rules of Monetary Policy" which includes an array of Fed Fund levels, most of which are sharply higher than current.
It is time for the Fed to have hard formula driven "guard rails".....the misread of "transitory" and the feet dragging should never happen again.
IF the inflation was "transitory", then any required rate rise could have been "transitory" as well. And if the inflation was not "transitory", then the immediate rate hike called for by formula would have been prompt and effective.
Money supply must also be formula driven, and only increase from a "pull" from an expanding economy.
In a system that boasts of "checks and balances", WHO CHECKS THE FED?
Some say “Abolish the Fed.” I think this overstates it. They do many things. But why do we need the Fed to control interest rates at their discretion? What you suggest might be a thoughtful way to handle it, as opposed to going full free market to set interest rates.
Just to provide background if anyone reads this who is not familiar. The Fed has controlled short rates for decades. Long rates used to have a measure of independence. But the Fed didn’t like that and recently began to largely control long rates with QE. That’s treasury rates. But corporate bond rates follow treasury rates pretty closely with a spread that doesn’t seem to move much, at least lately. And the treasury bond market is bigger than the corporate bond market. In short, the ham hand of the Fed has subverted the invisible hand of the free market in recent years.
JPOW said the Fed rate is now at neutral. Liar, liar, pants on fire! The stock market knows he is lying for their benefit and it bounds up. With inflation at 9.1% and the Fed rate at 2.25%, it’s so far below neutral it is in a figurative hell.
In December of 2018 when he was in the last "inning" of acting responsible as Fed Chair, inflation was 2% and Fed Funds were 2%. He referred to this as neutral.
Now, with inflation at 9% and Fed Funds at 2.25, he refers to this as "neutral".
The absurdity is tough to swallow. Maybe Nick from the WSJ can ask him about the word games. Fedspeak is not far from the "word salad" of VP Harris.
JPOW now says “transitory” wasn’t the right word. Two years from now, he will say “neutral” wasn’t the right word. But he actually knows when he says them that those are exactly the right words to accomplish his goal, which is to boost the stock market. Inflation? Who cares? Those are the little people. The 99%.