Quote from @Account Closed:
Quote from @Carlos Ptriawan:
Quote from @Matt Myre:
Quote from @Carlos Ptriawan:
Quote from @Eli Kantor:
Where rates will go next is unpredictable. There's lots of uncertainty at the moment. Even though inflation is at a healthier level for Powell, he has a tendency of overpromising rate cuts and underperforming on their delivery. I like @Scott Trench's take. Be logical, don't expect the best, and thus allow yourself to be pleasantly surprised if/when rates come down.
LOL what do you mean rate is unpredictable ? Some of you guys think the rate is a random act of weather ? LOL
10Y is at 3.75 right now after Powell's speech. Almost everyone who knows finance knows that Powell would dictate the rate and the discussion today is whether it's 50 or 25bps for the first cut in September.
The rate depends on the data, job growth and inflation, which is weaker in both prompts. Hence they already tell to reduce the rate possibly in September.
In all fairness to the unpredictability argument, the Fed had data showing massive spikes of inflation in 2021 while also knowing that the US government had injected trillions of dollars of stimulus into the economy during the pandemic but decided to pass it off as "transitory" due to "supply chain shocks" (not wrong, but wildly overblown). Inflation reached 9% before Powell made consistent moves. The bottom line is that the Fed is always hard to predict despite the data. If they were following the data in the way you're suggesting, then they would have started increasing rates far sooner than March 2022.
Thing is this, they want multiple data to follow their trajectory, they think one indicator like inflation data is not sufficient to make cut decision, they are then waiting for the employment to collapse to start printing again as they want to make the pain in economy as long as possible.
If the Fed was concerned about employment and job growth, they would have a more aggressive take on all of the illegal immigration and how that affects jobs availability.
They see it as an increase in consumers (the velocity of money) and are not worried about how these consumers are going to pay for the things they consume (job growth). That is why illegals are given a debit card at the boarder, to "pay" for food and housing. But, Wall Street does care. Just watch the markets.
If you print enough money, you can pay for anything . . . for a short while . . . they want to just hold on until the election is over and the house of cards collapses, then they are there to “fix” things”.
Take your pick, increase in unemployment, increase in inflation or increase in taxes.
The true question after all of the goverenment manipulation, is how much money do you actually end up with at the end of the year.
When it comes to the illegal immigration realm, we enter political discussion LOL (but I do agree with you).
One of their (strange neo-liberal) theory is that massive illegal immigration would reduce the inflation effect a lot and also they are not going to compete with the American.
Of course, that's their standing, which I could only laugh.
