RE:RE:Fed Hikes to continue with good jobs report. would jerome powell dare to raise rates to level of paul volcker's day?
it is obvious to any observers that so far rate hikes have done squat to the inflation rate. What's another and another dinky 0.5%-0.75% increment rate hike gonna do when opec+ just did a +20% rise to the price of oil (76's to 93's $/bbl oil WTI) without much effort. In fact, rate hike is hurting suppliers and producers more so than consumer demand, making these rate hike ineffective. We see UK start pivoting already. We know low oil price cure low oil prices, so is high oil price cures high oil prices. The bumbling fed is just interfering the free market,
Experienced wrote: This article highlights what I have been talking about.
1......going into the initial Fed rate hikes there were twice as many job openings as unemployed people and so what has happened is that the number d job openings have dropped but employment has stayed high- but this will change in the coming months
2....the economy is still absorbing trillions in Government stimulus which is working in the opposite direction as the Fed raising interest rates so it will take time before the bottom falls out for the economy
3..... as long as interest rates are below the inflation rate the stance by The Fed is stimulative
The problem is that the longer the Fed keeps rates below the inflation rate the higher interest rates will have to rise
So what do you need to watch?
It all boils down comparing the Fed rate to the inflation number. As long as it below the inflation rate the more there will more interest rate hikes