FED: 25pt hike +"potential pause"

KITCO

Federal Reserve Chair Jerome Powell signaled a potential pause in tightening following another 25-basis-point rate hike.

The Fed’s tenth consecutive increase brought the federal funds rate to a 5-5.25% range – the highest since mid-2007. But the May statement included a "meaningful" change, said Powell, pointing to the decision to take out the reference to "some additional policy firming may be appropriate."

This was a sign markets needed to confirm a pause in rate hikes. From now on, the Fed will be driven by a combination of incoming data and credit conditions, Powell said.

I actually listened to the whole press conference( that's a 1st tbh) and found it very informative. Here is my commentary on it from earlier FWIW

https://mark_davidson1-yahoo.tinytake.com/msc/ODE4NzA2Nl8yMTM5MjI4OQ

Edited by EntropyModel, 03 May 2023 - 05:18 PM.

FWIW here was my last update yesterday - i'm never sure if u can watch these video's without subscribing but I think so ..let me know if not.

https://markdavidson...echnical-update

Nice charts. I love looking over a trader's shoulder.

Thanx

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Edited by Rogerdodger, 03 May 2023 - 10:52 PM.

Currently, the FED Watch tool is forecasting a 98% chance of "no change" for June.

Odds now increase to 48% for easing to begin in July.

After that, the bet is that there is an 85% chance of easing to begin by a 1/4% point in September and then each and every meeting throughout the 4th quarter and into the 1st quarter of 2024 (1.25% total), Interesting to note that the boys and girls in the pits are now looking for the current target rate of 5% to 5.25% to drop to 2.75% to 3% by December of 2024.

Now...if the banks and small businesses can hang on after this egregious failure of monetary policy has past, maybe we can get things back in order. As I mentioned a couple times before, until the real problems are addressed, no amount of interest rate hikes is going to curb this manufactured inflationary attack on Capitalism.

Fib

Who knows interest rates back in 2024.  At the moment supply chain issues are getting better, but are still fragile and will be for awhile.   Lower oil prices are necessary to keep inflation at bay.   It is good they are down again but they need to continue to stay below $75 a barrel.  If it is able then food prices should stabilize and eventually drop as competition bleeds into the groceries.   The stability should keep the FED from raising.     I don't see the FED lowering anytime soon

Currently, the FED Watch tool is forecasting a 98% chance of "no change" for June.

 

Odds now increase to 48% for easing to begin in July.

 

After that, the bet is that there is an 85% chance of easing to begin by a 1/4% point in September and then each and every meeting throughout the 4th quarter and into the 1st quarter of 2024 (1.25% total), Interesting to note that the boys and girls in the pits are now looking for the current target rate of 5% to 5.25% to drop to 2.75% to 3% by December of 2024.

 

Now...if the banks and small businesses can hang on after this egregious failure of monetary policy has past, maybe we can get things back in order. As I mentioned a couple times before, until the real problems are addressed, no amount of interest rate hikes is going to curb this manufactured inflationary attack on Capitalism.

 

Fib

 

 

Totally with you on the manufactured inflation and believe the higher interest rates are more to crush people than to curb inflation.  Governments are the stupidest thing on the planet and why anyone with even a slight bit of intelligence would believe anything they say or do is obviously dumber than bricks!!  

Nice charts. I love looking over a trader's shoulder.

Thanx

 

Welcome.