Interest rate

 

hikes wont solve supply shocks.

There's simply to much $ chasing to few goods.

Stores stocked up to have a buffer against supply line issues.

Now people cant even afford to even go to the stores let alone have money for anything "extra".

Stores will discount their wares to try and sell them but by that time hardly anybody is going to have any $ to buy anything even at discounted prices.

"Oh, Hold tight

Cuz the road can be a crazy ride"

Here’s everything the Fed is expected to announce, including the biggest rate hike in 28 years

"The Federal Reserve on Wednesday is expected to do something it hasn’t done in 28 years — increase interest rates by three-quarters of a percentage point."

"In response to soaring inflation and volatile financial markets, the central bank will hike the rate that banks charge each other for overnight borrowing to a range of 1.5%-1.75%, where it hasn’t been since before the Covid pandemic crisis began."

"That rate feeds through to consumer borrowing, impacting virtually all adjustable-rate products such as credit cards and home equity loans."

(And you think you don't have any $ left over now after paying your bills? Just wait. And 2.25 -2.5% crashes the housing market. My figuring says they will try to wait to get to that point till after the midterms.)

"Goldman Sachs said new language in the statement could indicate that the rate-setting Federal Open Market Committee “anticipates that raising the target range expeditiously will be appropriate until it sees clear and convincing evidence that inflation is moderating,” which the firm said implies “a high bar for reverting to 25bp hikes.”

"Powell will be called on to explain the Fed’s recent shift in rate expectations. He and other officials had been pushing the narrative that consecutive rate increases of 50 basis points would be the most likely course."

(Because they know what happens at 2.25-2.5 %, the housing market crashes, which it's already well on its way,  and at 4%, we default on the interest payment on the national debt, so they had no choice but to try and put it off as long as possible.)

"In fact, at his last news conference in May, Powell dismissed 75 basis points as an option, saying it was “not something the committee is actively considering.” A basis point is one one-hundredth of a percentage point.

"Now, Powell could provide indications that multiple 75 basis point hikes are possible if inflation readings don’t start to come down."