So either this is a political exercise to try to maintain confidence & avoid a panic or it again shows a Fed board so far behind the curve they don't even see it.
Concerning either way.— Sven Henrich (@NorthmanTrader) June 16, 2022
And they put the December sub 1% fed funds forecast out when CPI was already at 7%. They can't be that clueless, can they?
Once again completely wrong and misleading and removed from reality.
And no reporter is confronting them on this blatant nonsense. pic.twitter.com/nTF9ImW39s— Sven Henrich (@NorthmanTrader) June 16, 2022
THERE IS NO SIGN OF A BROADER SLOWDOWN IN THE ECONOMY pic.twitter.com/EntNLdvdZ3
— Sven Henrich (@NorthmanTrader) June 16, 2022
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Pay no attention to the bogeyman behind the curtain.
I think there’s a real danger in debating “what the Fed should do”. That creates the assumption that the Fed really should be controlling the economy, Soviet-style, and the only question is whether they’re doing it competently or not.
Real economists like Henrich know this but feel they need to stick to the narrative in order to show how badly our PhDs at the Fed are performing.
The real comparison would be between what we’ve got and what the free market would provide. If I had a million dollars to invest, what interest rate would I demand to ensure a profit when my investment is paid back? Since we don’t have a free market, we won’t know, but it would certainly be more than the current >10% price inflation rate (per ShadowStats).
I think that’s the idea the Fed is trying to convey concerning long term bonds to maturity. That they are serious.
A quick search shows the average 30-year mortgage rate as of today is 4.20%. Again, the dollar is losing value at more than 10% per year. Banks do this because the government (Fannie and Freddie) and the Federal Reserve itself buy these loans and put the taxpayers on the hook. The only thing they are conveying is that we are seriously fucked.
(shrug) at this point the fed IS the economy.
which always was the plan since 1913.
Someone please explain to me why the markets were green all day yesterday, both before and after the fed announcement. Today, with basically the same news, it is plunging downward in all sectors — even crude.
There’s no explanation for it, other than the big fish are playing short-term dump and pump games.
This is what I’m going with as the reason. Big swings are their friend.
Yep, if you are in control of the swings, you can position yourself to profit regardless of the direction of the swings.
Brewer, my guess is that the markets were afraid the Fed would move even less than 3/4. When they did the .75 there was a relief rally of sorts. Prime rate is now 4.75. A Fed funds rate of 3.5 would put prime at 6.5%. I think it was 9.5% in 2000.
30-year mortgage on our first house (purchased in 2000) was 8.125%
Sir,
The FED opened a second office in Chicago to get next to the futures markets as all the other big money runners, aka Banks dis a few years ago. Object being to front run the up ticks in nano second time, robot vs robot. How they programmed them when markets going down we do not know.
If it is still front running down??
The elephant in the room is MARGIN DEBT that is unwinding!!!!
“why”
because TINA.
With my work 403b I’ve had 90% of it in the TIAA Cref guaranteed fund, so no losses when market crashes.
My IRA rolled over from previous jobs has about 50% in money market and 50% in some gold, silver and energy investments that are getting hit with this crash.
At least the Vanguard MM will start paying some dividends with the Fed increasing rates.
“guaranteed fund”
what backs the guarantee?
As info, about 3 months ago, I contacted my current financial guy, as well as 2 other recommended financial institutions, asking them a simple question. With money parked “safely” in cash, what happens if the US Dollar loses its reserve value and the dollar crashes. What will you do then?
Not one of them could give me an answer. It is as if “oh well, if that happens, we are all fooked!”.
“Not one of them could give me an answer”
because there isn’t one. if the dollar crashes then virtually all imports will cease, and .95 of everything you see in the stores is imported.
That is the answer.
Sad Fact : The Federal Reserve And it’s fractional bank lending structures should not even exist and those profiting from its command and control of what should be our currency owe the average Americans a kings ransom from their organized theft of the value (purchasing power) of our money !
Reality it does exist and the elites behind the curtain know they have overplayed this poker-hand and that’s the reason for Red Flag Laws
The Trump-Mnunchin USD $17.66 TRILLION REPO (Sep 2019 to Jun 2020) is bearing its fruit. COVID was monetary policy. Privately owned Federal Reserve holding USD $9.0 trillion in paper assets. Fed fails then all global central banks fail and goodbye Basel. Official US debt full faith and credit paid back in Federal Reserve notes printed to infinity and beyond. Systemic failure means system is over. Are beans and ammo the currencies of the near future?
Beginning to wonder if this was the opening salvo in the destruction of the Federal Reserve system. Did Road to Roota go operational in Sep 2019?
“Are beans and ammo the currencies of the near future?”
no. whoever has them will not be trading them away. most economic activity will consist of banditry.
“the opening salvo in the destruction of the Federal Reserve system”
no. it’s the culmination of the “federal” “reserve” system. this was always intended.
That culmination seems to have been pushed over the cliff back in Sep 2019 so it was either the final big money grab or it was to intentionally initiate the destruction. I’ll consider the latter as possible for now. If some one with half a brain was running the show they would have used much of that fake money printed up since 1971 to secretly buy up gold and silver and keep it hush until the day of the Federal Reserve collapse. But that is optimistic and we are dealing with criminals.
“they would have used much of that fake money printed up since 1971 to secretly buy up gold and silver and keep it hush”
they have.
What’s a 401k?
it means you put in 4 and get back 1. ‘k?
Now that is good! I must remember that one.
Like Ameriprise and my 90 year old father in law. He has less money in his account now than when he retired 29 years ago. He has never actually taken any out.
Central Banksters getting properly skewered as the bureaucrats they are. IYI Bureaucrats.
Reminder IYI = “İntellectual Yet İdiot.” Hat tip to the genius of N.N. Taleb.
https://www.zerohedge.com/markets/rabobank-central-bank-amateur-hour-means-growing-risk-people-sharpening-guillotines
You still consider Taleb a genius, after the Covid saga?
I now see him as a great risk manager, but a bad/failed philosopher.
“To put out a 3.8% funds rate forecast with a positive GDP outlook at the same time is not only disingenuous it is completely removed from reality”
you don’t understand – you think you and they are in the same reality. you’re not. the positive gdp outlook is for them, not you. they’re going to do well by making you do badly. in their world, that’s how it works, and they’re perfectly fine with it. until you realize they’re not talking about you, they will look stupid/crazy to you – but the problem is not with them, but in your perspective.
THE LAST OFFICAL ACT OF EVERY GOVERNMENT IS TO LOOT THE TREASURY.
And if you gather up ALL the experts and they agree,then I’ll believe you……./sarc……