San Francisco Fed President: ‘We will likely be taking a 50-basis point increase’

“San Francisco Fed President: ‘We will likely be taking a 50-basis point increase’” への8件のフィードバック

1. They not going to get to 2.5 before market collapse and infamous 2nd Powell pivot, destroying the dollar and further inflation. They will also reintroduce stimmy.

   Reply

2. Dollars were printed too much. 0.5 ^^ isn’t gonna effect a bit.

   Reply

3. Will they actually follow through?

   Reply

4. God bless everyone

   Reply

5. I think the Fed should begin rapid balance sheet reduction first, before raising any Fed interest rates.
   The current inflation is mainly due to the Ukraine war, Covid-19 disruption, deglobalization, and QE, which cannot be solved via interest rates.
   Raising the interest rates will only let ordinary people suffer more, especially with the increase in the mortgage/rent payment.

   For ordinary people, the effect of double the mortgage/rent payment is much higher than double the energy & food bill. People can go through the unavoidable increase in their energy & food bills, but why should the Fed add a much heavier layer of higher mortgage/rent to them quickly before they can go through the higher bills first?

   The rapid expansion Fed balance sheet via the QE program is unhealthy, and it mainly creates inflation and helps the people in the financial world, while the interest rate affects the living cost of every ordinary people.
   I think the Fed should start the rapid balance sheet reduction first, while raising the interest rates only after the reduction is finished, and give some time to the ordinary people to let them have enough income to pay for their monthly bills.

   Recently, lots of investment banks and financial institutions urge a quicker increase of the Fed rates, which will only benefit themselves but not the general public, as the investment banks have already purchased lots of derivatives against the well-informed rates rise. The quicker raising rates make the financial cost and holding time value premium of the hedging derivatives lower, and the higher rates let the banks earn much higher interest payments after these hedgings. While ordinary people have not done any hedging.

   Originally, the bankers should not earn so much profit from these hedgings. But if the rates are raised much higher and quicker, the bankers can get big profits from the lower cost derivatives, and also enjoy higher interest payments from their fixed-income securities holdings after this profit, while they also earn the money from the loss which Fed made during the selling of their holdings with a lower price after its rates rise.

   Rates up first -> bonds price down -> later Fed reduce balance sheet with a lower price -> public Fed lost money to private bankers -> BAD.
   Reduce balance sheet first with a normal price before rates up -> public Fed does not lose -> raise the rates after balance sheet reduction -> GOOD.

   After transferring so much wealth from the public into the private bankers via a quick hudge rates rise, If the balance sheet is still not reduced, a recession will come as every ordinary people are suffering from the rapid huge rates disruption without hedging, and Fed will just see the increase and later reduce the rates, as well as, create an even bigger unhealthy balance sheet!

   What is more, in order to maintain the US dollar hegemony, both reducing the Fed balance sheet and keeping the Fed rates stable are very important, as no one wants to hold a volatile and massive expansion thing.

   In history, the last several rate hike cycles have never brought the US equity market down. Please compare the full chart of SP500 and federal funds rate! How could the raising rates reduce the price of assets?
   If the fed reduce the balance sheet without raising rates, the house price will go down, and the monthly mortgage payment will be steady. People will find an easier life.
   If the fed raise the rates without reducing its balance sheet, the house price will still be super high, and the people have to pay much higher mortgage. People are suffering!

   Reply

   1. Inflation has been happening for a while even before the current Ukraine Russia event. People talked about inflation last year, too remember?

      Reply

6. The Chinese Yuan will soon be taking the dollars place, then the Federal Reserve can do whatever they want with their private corporation toilet paper money and we won’t have to listen to them ever again.😂😂😂😂😂😂😂😂😂😂😂

   Reply

7. Well no sheet…tell us something we dont know

   Reply