Axios’ Post

One to cut out and keep? Fed Governor Michelle Bowman's statement on Friday gives the reasons she voted for a smaller rate cut: 1) The US economy remains strong; 2) Despite progress, inflation remains a concern. If r* has indeed risen substantially since the pandemic, the Fed has just embarked on a highly pro-cyclical rate-cutting cycle. In Chair Powell's rather lovely turn of phrase, we will 'know r* by its works'. How long before the next inflation scare prompts a shift in Fed strategy?

Federal Reserve Chair Jay Powell reaffirmed the Fed's stance on rates, citing a persistently "bumpy" road toward achieving the 2% inflation target. Despite market anticipation, the Fed left its forecast for rate cuts unchanged, emphasizing a gradual approach to monetary policy. With inflation data driving volatility, Powell's transparency offers investors a guide to navigate economic fluctuations. #FederalReserve #Inflation #MonetaryPolicy #Investing

US Fed remains cautious about inflation In its recently concluded policy meeting, the US Federal Reserve maintained status quo on interest rates while projections for inflation and economic growth remained high.   In her recent blog in the ‘On My Mind’ series, Franklin Templeton’s Sonal Desai, CIO, Global Fixed Income, shared her insights about the Fed’s policy and what investors can expect going ahead. A few highlights of the blog are: 🍭 Median rate forecast implicit in the Fed’s dot plot still implies three rate cuts this year.   🍭 Financial conditions as measured by the Bloomberg index are currently as loose as when policy interest rates were at zero.   🍭 US Fed wants more data to understand whether January and February inflation readings were “bumps” or signs that inflation is getting entrenched above target.   🍭 Reducing policy rates too soon or waiting too long could be risky.   🍭 Rate cuts by the US Fed are expected only in the second half of the year. For the detailed blog, please click 👇

1. Federal Reserve officials believe the policy rate may have reached its peak. 2. They wish to observe further progress towards a 2% inflation goal before considering rate cuts. 3. Fed remains highly vigilant regarding inflation risks. 4. Chair Powell intends to begin the next 5-year review of the Fed's policy statement in late 2024. 5. Some officials highlighted the potential dangers of maintaining excessively high interest rates. 6. The majority of Fed officials emphasized the hazards associated with reducing rates too swiftly. 7. A few officials expressed concerns that progress towards inflation reduction might pause. 8. ⁠Fed Funds Futures Contracts are consistently indicating a potential first rate cut by the Fed in June. For information only

The Fed Would Be Wise to Listen to Jaime Dimon ***************** Jamie Dimon has proven to be an adept CEO, who possesses an outstanding pulse on the market. Nobody has a perfect track record, but his is very impressive. The market is once again forecasting imminent rate cuts from the Federal Reserve, and Chair Powell has once again fueled their enthusiasm by signaling that cuts may begin before inflation returns to the two percent target. Financial history strongly suggests that this would be a mistake. Moreover, because it would be the second mistake in less than a year, it would be especially costly. If the Fed ignores a critical lesson from the Great Inflation of 1965-1982 (see the recent post in the comments for more details), they should at least heed the more recent warning from Jamie Dimon. If the Fed cuts rates prematurely and is forced to backtrack, the hit to their credibility will likely be far more severe than it was in December 2023. This would necessitate much more draconian monetary policies because the Fed would not only be fighting inflation, but it would also need to fight higher inflation expectations and reestablish its credibility. #monetarypolicy #federalreserve #inflation https://lnkd.in/gfhX6f4c

Monetary Policy Challenges: The Federal Reserve's Dilemma in Rate Reduction The anticipated reduction in interest rates has been announced by US Fed Chair Jerome Powell. According to him, the Fed needs more time to be certain that its efforts to combat inflation are having an impact. Tuesday's downturn in interest rate forecasts was signaled by US Federal Reserve chair Jerome Powell, who may have injected so much cash into the economy during the pandemic that excess is still flowing through the nation. Powell remarked during a panel discussion at the Wilson Center in Washington, DC, that although the pressure on inflation has decreased over the past year, it hasn't decreased sufficiently in recent months. "The recent data have clearly not given us greater confidence and instead indicate that is likely to take longer than expected to achieve that confidence," Powell said on Tuesday(16-04-2024). This indicates that the Fed is currently unsure that inflation will eventually reach its 2% target level. A strong increase in jobs is driving up prices. Powell emphasized that there had been minimal movement in the Personal Consumption Expenditures Price Index (PCEPI), a crucial inflation indicator for the Fed, from its 2.8% reading in February to the current value of 2.7% in March. Thus, in order to slow price increases, the Fed can maintain higher interest rates for longer. Powell clarified that in the event that the labor market "unexpectedly weakens," the central bank may still lower rates. Source: Business Insider India Saumitra Mondal Equivaluesearch #finance #business

All Eyes on Powell: Fed Chair likely to Tackle Inflation, Rate Hike Speculations at Next Press Conference. Jerome Powell will make an appearance at a press conference Monday, September 30, 2024, following the FOMC meet. He is likely to discuss the most updated policies of the Federal Reserve regarding monitory policies and changes in interest rates amid new economic projections. In this light, of the highlights likely to be indicated, these may include the current state of inflation, the labor market, and the broader U.S. economy. Here, Powell's message would be attentive to comments regarding what the Fed might do in shaping its future policy attitudes on possible rate rises or pauses. The Fed now has to decide how it can maneuver amidst those economic uncertainties. The press conference is a highly important event because it allows Powell to clarify the Fed's stance regarding monetary policy and its implications in markets. Neolinresearch #JeromePowell #FederalReserve #FOMC #MonetaryPolicy #InterestRates #Inflation #EconomicForecast #USEconomy #CentralBank

Unraveling the Fed's next moves - are they playing chess with our interest rates? 🎲⏳ Let's dive in!🔍 In a year where every economic decision feels like a chess move, Fed Chair Jerome Powell's latest remarks to U.S. lawmakers underscore the delicate balance the Federal Reserve aims to maintain.🏛📉 Here's my breakdown of Powell's key points and what they mean for us: ✅ Rate Cuts on the Horizon?🌅 While the Fed anticipates potential rate cuts later this year, they're contingent on continued evidence of inflation easing. The takeaway? Flexibility is key in our financial planning.💡💰 ✅Steady as She Goes:⏱ The Fed's commitment to "keep our heads down" and focus on data rather than political pressures offers a reminder of the importance of staying focused on long-term goals amidst noise.🔇 ✅The Inflation Dilemma:🎈Despite an optimistic view of avoiding immediate recession risks, Powell admits inflation progress is "not assured." This means investors and businesses alike need to stay vigilant and adaptable.🔭🔄 ✅Economic Strength vs. Rate Decisions:💪💹 The complex decision of when and how far to reduce interest rates amid signs of both disinflation and unexpected economic strength highlights the ongoing uncertainty facing the economy. Each day, I analyze how such macroeconomic trends can impact the real estate sector.📊 By understanding the broader economic landscape, we can better navigate the challenges and opportunities ahead. Stay tuned for more insights on how these developments could affect 7fold's strategies and decisions.🎯 #EconomicInsights #FederalReserve #InvestmentStrategy

📊 Key takeaways from the latest Monetary Policy Report from the Federal Reserve on what it will take for fed’s policymakers to feel comfortable enough to begin cutting interest rates. 📌 Inflation expectations are broadly consistent with 2% goal. 📌 Labor market remains tight, demand has eased, and supply has trended higher. 📌 Risks to achieving Fed goals moving into better balance, Fed remains attentive to inflation risks. ‼️ However, it remains inappropriate to reduce target range until Fed has greater confidence inflation will move sustainably toward 2%.