Fed hikes interest rates by 75 basis points for fourth straight meeting
S E E D E D C O N T E N T
The Federal Reserve on Wednesday raised its benchmark interest rate by 75 basis points for the fourth straight month as it struggles to bring runaway inflation under control, a move that threatens to further slow U.S. economic growth and exacerbate financial pain for millions of households and businesses.
The three-quarter percentage point hikes in June, July, September and November — the most aggressive series of increases since 1994 — underscore just how serious Fed officials are about tackling the inflation crisis after a string of alarming economic reports. Policymakers voted unanimously to approve the latest super-sized hike.
The widely expected move puts the key benchmark federal funds rate at a range of 3.75% to 4%, the highest since before the 2008 financial crisis. It marks the sixth consecutive rate increase this year.
However, the Fed also hinted at the possibility of smaller rate increases at future meetings as policymakers acknowledged that tighter monetary policy takes time to work its way through the economy.
"The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time," the Fed said in a new sentence added to its post-meeting statement.
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While the news turned the stock market up, what will the future bring with this latest increase? How bad will the recession next year be? Will it make Carter look like an economic genius?
Trump is off-topic.
Fairly certain had a Republican been in the White House, with two quarters of negative GDP (first &second quarters) the Democrats would have been all over shouting about a recession. And if people are honest about themselves, they would admit the only reason why the third quarter GDP was not negative was due to a reduced trade deficit. But the official word is that we won't see recession until next year and it will be mild.
With this and other news (diesel fuel shortage, inflation) just how expensive will this winter be? Wonder how the Democrats can redefine the verbiage to help lessen the pain to come?
The market has actually bounced since the announcement. I think people were afraid it would be a full percent.
Too bad that bounce was so short lived. Wonder what this will do for the market long-term however.
Wow. Was it ever.
Don't we all wish we could see that coming?
The election should be good. Historically, midterm election years are not very good for the markets, but the following years are. Fingers crossed.
I was listening to a financial report the other day, I forget who the guest was. He was stating that the coming recession next year will be big, not as big as the dot-com burst but significant none the less. But he was putting recovery as strong and predicted a market around 100,000 by the end of the decade. All I could say at the time was I'll have what he's smoking. A gain like that in 8 years would be great for my retirement, but that seems like wishful thinking to me.
Wonder what the odds of that are compared to winning the next Powerball drawing...
The common wisdom is that in order to kill inflation interest rates need to be raised to the point that they are no longer effectively negative rates. With inflation rates at something like 9 percent that means the the interest rates are going to need to be raised that high.
A softer landing could be achieved if other factors in the economy could be brought under control.
Putin has disrupted world energy and food supplies. That is certainly not helping.
But there also seems to be some price gouging on the part of American corporations, with oil companies getting particularly comfortable with record high profits from record low production.
We really need to see some more progress on the "too few goods" side of the problem.
So you're running with the "it's Putin's fault" fallacy. Everybody laughed at Biden when he said it. You don't think you'll get laughed at as well?