Despite signs of inflation slowing, the fed doesn’t see it regressing anytime soon.
This means interest rates will stay the same or possibly even go further up over the coming months. Of the 19 top Federal Reserve officials, none of them believe it will become appropriate to cut the interest rates this year. As recorded in the minutes of the central bank’s meeting in December, they were released on January 4th, and don’t paint a very rosy picture for 2023.
While they were presented with figures showing a recent emergence of evidence for slowed price increases, it was not enough. In their eyes, it will take continued and sustained progress to be convinced inflation is truly retreating.
Yet, oddly enough they informed futures traders to expect the Fed to start reducing rates this summer.
It’s concerning that they don’t see the rates dropping for the rest of us, but they expect them to drop for futures traders. This sign is that those who can invest heavily in futures who already have enough money will continue to get more as they find things going more favorably for them soon. They substantiated this belief by claiming that if the market were to ease financial conditions based on a misrepresentation by the Fed it “would complicate” their efforts to stabilize prices.
When the Fed is making the economy this hard to manage, it’s a sign of someone else complicating things. In this instance, the complication is all compliments of President Biden. His policies to reduce US oil outputs and to choke off our infrastructure with horrific policies from the opening gate are what has complicated everything.
Under President Trump, we not only pushed through a pandemic (as created by Dr. Fauci), and came out with a growing job market, but we also had a successful economy. We were beginning to return to the prosperity the US is known for. This was a beautiful thing, but for the left, it was the ugliest idea ever.
With Trump’s polarizing presence due to his not being a member of the political status quo, they did everything they could to smear the man. Since he left office, they have kept after him at full force, too.
All this is for trying to return the American economy to the people. For trying to put the American people above special interest groups. It’s a reprehensible act, and now the American people are suffering, and because of the Presidential policies, the Fed can’t help the economy or the American people. Naturally, because they control what we can do to help ourselves, we are rendered essentially helpless.
Of the 19 officials polled, 17 expect interest rates above 5% this year. While most are expecting 5.25% to be the top of the mark, seven have listed even higher rates. It’s much higher than previous expectations, and it puts everything in jeopardy. With the next meeting at the end of January, they have projected a slowing to a 25-basis-point hike at that time. They went on to claim that they are working diligently to balance doing too little and fueling the inflation rocket, and doing too much so the economic movement is torpedoed.
What does this mean for you?
If you have big purchases on the horizon, be prepared for things to continue getting worse.
While the housing market is finally returned to realtors being more flexible, the prices are still sky-high in many areas and are coupled with steep interest rates. Meanwhile, in the car market, cars are rolling into dealerships, and inventories will continue to build. This means the used car market should soften, but the chip shortage is still delicate and will be for some time.