Feds are 6-8 months behind the curve They know the true numbers recalculating the numbers in a way to show positive is disastrous. Rates uptick slows economy and hurt comanies bottom line , dragging feet not listening to the consumers and raising rates makes companies porer , not raising rates make inflation uptick makes consumers poorer , purchasing power is low due to inflation . Highschool economics class 101.
El Erian's view in is not purely market focused this time. The most cogent comment in my opinion is that a 2% inflation target is not appropriate for either the national US economy nor the global economy, both in flux for a litany of reasons, not the least being the pendulum swing away from free-market globalization. Wars, energy, climate change are all significant factors. All require a re-set on regulation and governmental sponsorship. A-I is a true disruptor that will result in lower costs, but it is a massive infrastructure cost along with labor displacement and retraining of skills. All those things cost money that is not immediately effective on productivity. You've got to spend money to make money, and returns come over time.
Obviously, there are those that will raise prices just because they see a headline inflation number. Consumers find alternatives. Starbucks, KFC, and MacDonalds have all reported results confirming this. Groceries, given the ongoing consolidation in retailers will be a tougher nut. But I don't see anything magical about 2% in economies undergoing structural changes.
To cut or not to cut?
Strong economy & sticky inflation gives no reasons for a cut. However, if you do not ignore long lasting structural changes globally (globalisation being replaced by fractionalisation) 2% inflation target may seem no longer sustainable. So the target may appear to be closer to 3% and FOMC is reaching it already…
There is no miraculous way to raise the economy if you previously did not have the courage to make fundamental, painful structural changes. The huge amount of money pumped into the economy had to show up somewhere, and today it helps push inflation up. It is therefore not possible to expect the 2% target to be maintained without it having a significant impact on economic growth. No artificial regulation has ever been the basis of real economic growth
💵🔍 Understanding the role of the Federal Reserve in influencing inflation and the broader economy is essential, yet complex.
Dr. Murphy skillfully demystifies this topic, providing a lucid and thorough examination of the Fed's policies and their repercussions.
This article is more than just educational – it serves as an indispensable resource for investors and business owners, enabling them to strategize effectively and traverse the economic terrain with greater assurance. https://lnkd.in/evVmK6vf
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Investors are increasingly uncertain about what the Federal Reserve plans to do this year as they absorb hot economic data and mixed commentary from some centr...
📊 Federal Reserve Update: Insights from Atlanta Fed President Raphael Bostic
1. The Fed cut rates by 0.5 percentage points, signaling a shift in monetary policy direction.
2. Rationale for the rate cut:
• Sustainable progress on inflation
• Cooling labor market
• Balanced risks to price stability and maximum employment mandates
3. Inflation insights:
• PCE and CPI indices nearing target ranges
• Narrowing breadth of price increases
• Core inflation showing positive signs
4. Labor market status:
• Weakening but not weak
• Unemployment rate at 4.2%
• Job openings above pre-pandemic levels, but declining
5. Policy stance:
• Moving towards a neutral rate
• Cautious approach due to lingering inflation concerns
• Ready to adjust based on incoming data
6. Future outlook:
• No locked-in cadence for further rate moves
• Data-dependent approach continues
https://lnkd.in/edubcRWY#FederalReserve#MonetaryPolicy#EconomicOutlook#FinancialMarkets
🚨 Powell's Latest Signal: Navigating the Economic Crossroads 🚨
In a move that caught the financial world's attention, Federal Reserve Chairman Jerome Powell has indicated a delay in anticipated rate cuts, pointing to persistent strength in both inflation and the labor market. This update could redefine expectations for the economy's direction in the near term. Join us as we dissect Powell's announcement and its implications for investors, homeowners, and the average American.
🔍 **Inside This Episode:**
- **Understanding Powell's Stance:** A breakdown of Powell's reasoning behind the pause on rate cuts, highlighting the current state of inflation and job market resilience.
- **Impact on the Economy:** Explore how this decision affects everything from the stock market to mortgage rates and personal finance.
- **What's Next for the Fed?** Delve into expert predictions on the Federal Reserve's future moves and strategies in response to ongoing economic conditions.
🎙️ **Expert Insights & Analysis:**
Don't miss our panel of financial analysts and economists who will unpack the Federal Reserve's signals, offering clarity and foresight on what these developments mean for the broader economic landscape.
✨ **Why It's Crucial:**
In a climate of uncertainty, Powell's cautionary stance on rate cuts serves as a critical marker for the economic path ahead. This discussion is essential for anyone looking to grasp the complexities of today's financial environment and make informed decisions.
The Federal Open Market Committee convened in March to discuss potential interest rate cuts, the current state of the Federal Reserve balance sheet, and forecasts of unemployment and economic growth. In his latest insights article, Chief Investment Officer, John Gullo, gives commentary and insights about the latest Fed meeting.
Read more here:https://hubs.li/Q02r6qq70#financialmarkets#monetarypolicy#interestrates
The Federal Open Market Committee convened in March to discuss potential interest rate cuts, the current state of the Federal Reserve balance sheet, and forecasts of unemployment and economic growth. In his latest insights article, Chief Investment Officer, John Gullo, gives commentary and insights about the latest Fed meeting.
Read more here:https://hubs.li/Q02r6mK60#financialmarkets#monetarypolicy#interestrates
The battle between what the Federal Reserve will do with interest rates and what market participants believe will happen, will be the making of tremendous volatility in the coming year. Check out this week’s CEO market commentary to see how this affects your investments and decisions.