FOOLS

 

Fed officials push back on rapid interest rate hikes

It's already to late is the situation were in.

The Federal Reserve should start raising interest rates next month to help rein in too-high inflation, Federal Reserve Bank of New York President John Williams said Friday. 

“Personally, I don’t see any compelling argument to take a big step at the beginning,” Williams said following an event at New Jersey City University to discuss the economy and interest rates.

The compelling argument to take a big step in the beginning (raising rates) is Inflation is 15% if we used the metric we used to use.

"Williams, who is vice chair of the committee that sets the Fed’s interest-rate policy, said he sees a March increase as the beginning of a “steadily moving” process to get interest rates closer to a level where they are no longer stimulating the economy."

("You need restrictive monetary policy. And no one is even talking about making money tight. All they’re doing is talking about making it less loose. And you can’t fight inflation with loose money.”

Peter Schiff of Schiff Gold for the article, The inflation Tsunami Is Just Getting Started)

"He (Federal Reserve Bank of New York President John Williams) also said he expects inflation to fall from its current level due to a confluence of factors, including the Fed’s moves and hoped-for improvements in supply-chain bottlenecks."

If your hoping for inflation to fall to due hoped for improvements in supply chain bottlenecks and Fed moves? (Increased interest rates)

It's like fighting a mammoth wildfire with a garden hose. Good luck.

"Krishna Guha, an analyst at investment bank Evercore ISI, said that Brainard “broadly endorsed” Wall Street’s expectations that the Fed will hike rates six times this year.

She also said the Fed would soon turn to reducing its huge, $9 trillion balance sheet, which has more than doubled during the pandemic because of the Fed’s bond purchases. She said they would likely do so more quickly than from 2017-2019, when they allowed about $50 billion in bonds to mature without replacing them.'

(More than doubled in 2 years but nobodys talking about to much $ being the culprit here.)

"Charles Evans, president of the Chicago Fed, said Friday that the Fed needed to adjust its low-interest rate policies, which he called “wrong-footed.” But he also suggested that the central bank may not have to sharply raise rates this year.

Evans also said that high prices have mostly been caused by disruptions to supply chains and other factors stemming from the pandemic, and will likely fade partly on their own.

(See my comment in the parenthesizes above.)

But he (Mr Evans) said that the big-picture movements make sense, based on expectations that the Fed will move its key interest rate closer to normal, like 2% to 2.5% by the end of next year."

(You have got to get interest rates above the inflation rate or it's not gonna work and were not even measuring the inflation rate correctly at this point, queue brother Brian, "It's not complicated!)

"Other speakers at the New York conference focused on whether the Fed had erred when it adopted its new policy framework in August 2020, which sought to keep rates low until inflation actually materialized. Previously, the Fed would typically raise borrowing costs when the economy was healthy to preempt any inflation.

Frederick Mishkin, a former Fed governor and economist at Columbia University, said the Fed had “made a serious mistake” in not hiking rates earlier to prevent inflation from taking off. Now Fed officials may have to raise rates much higher to bring prices back in line, he added.

Evans, however, defended the Fed’s new policy framework by pointing out that in the past, when the Fed hiked rates to preempt inflation, such moves likely cost many jobs. And in some cases, inflation didn’t materialize."

It's Better to stop a wild fire before it starts than to try and put it out with a garden hose.

Somebody queue him up again :-).

Hes gonna get tired of saying it before its all over :-).

It's not complicated!