Fed set for another big rate hike with economy on knife's edge

Treasury Secretary Janet Yellen, herself a former Fed chief, warned last week that achieving a "soft landing... will require skill and good luck."

If she were still Fed chief, this situation wouldn't be so critical. Obama hired her and unfortunately Trump fired her -- after complaining she was too cautious by raising interest rates -- and appointed to the current guy, who lowered rates and then balked at tapering when inflation emerged.

Thanks, Trump.

Huge earnings coming this week plus FOMC decision WED, embrace the volatility.

Inflation costs votes. So does raising interest rates - especially when it doesn't work and just adds to the suffering. Buckle-up for a Republican America a couple of years down the line, and all that that entails, in the US and globally.

Inflation have not not stopped the 800 million dollars Megamillion

@Jexan

Biden’s whole admin were in inflation denial and were too slow to react. 

Nice try. The govt is limited when it comes to fighting inflation. It's the Fed's remit to maintain stable prices, which is why it's the one with the policy tools and has independence from the government in policy setting.

Well I guess that means Yen goes down again...

JL

The Fed is to some extent forced to print money if the government continues with huge deficits. Only way to fund the deficit is to print the money and buy the bonds. Not enough private demand for treasuries when the Fed is artificially manipulating the interest rates to keep debt service cost low. One reason why their bluster about raising rates can only go so far - maybe 4%? Above that the US budget becomes unsustainable, with debt service eating something like 30% of tax revenues.

So even if the Fed doesn't take its marching orders from the WH (a big if, but....) they are still forced to print.

and money printing = inflation = rising prices.....

nice try. Trump doesn’t get a free pass but Biden’s whole admin were in inflation denial and were too slow to react. They also reduced domestic oil production which was a direct contributor.

yes Biden is responsible for the inflation, just as Trump is responsible for the worst recession in 70yrs and 20million lost jobs, goes both ways. If you want to blame Biden for worldwide inflation, then blame Trump for his recession and lost jobs. US oil production is near record highs, US oil prices is dictated by world markets, unless American can pump enough oil to supply the entire world, OPEC will be the organisations that has control on world oil production. No US companies will not sell at a discount to AMericans if they can get full market price exporting it

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

In Biden’s economy the rush get richer and middle class gets squeezed.

amazing people can say that when Trumps only legislative achievement was a 2017 $trillion tax cut for the rich, vast majority of it went to share buybacks, explain how that benefitted Americans, also proven by numerous experts that trickle down economics has never worked

Buckle-up for a Republican America a couple of years down the line, and all that that entails, in the US and globally.

last 70yrs there have been 11 recessions, 10 of them under a republican's president, thats what America is headed for

A combination of utterly useless central banks around the world coupled with totally profligate governments have led to worldwide inflation of the money supply. Hence price rises.

If Powell thinks that some insignificant raising of the fed funds rate will deal with inflation he is about to be proven sorely wrong. And in the meantime he will destroy asset prices, hurt the economy and even further damage US government finances.

@Jexan

And you honestly believe the Fed doesn't get its marching order and talking points from the Whitehouse

Now you're in the conspiracy theory realm. The govt has authority over taxing and spending, the Fed over the tools used to maintain stable prices and full employment. Someone didn't pay attention during Econ 101.

@Kaerimashita

A combination of utterly useless central banks around the world coupled with totally profligate governments have led to worldwide inflation of the money supply. Hence price rises.

Nope. The inflation is due to the current unprecedented squeeze on the global supply chain, which is why the trend is global and not, um, like, Biden's fault.

Japan was doing what you said for 20 years and to a greater extent than anyone -- and ended up with deflation. How do you explain that?

Didn't say it was Biden's fault. Orange also spent wildly.

Inflation showed up in asset prices on more than one occasion in the last 2 decades. also the money printing prevented deflation (which is not a bad thing) which would have otherwise occurred. Now the money printing is finally showing up in consumer and producer prices.

I get you not an Austrian or Miltonite, but to blame all the price rises on supply chain/Putin etc is not the right way to look at this. Inflation will not go away if the war ends and supply chains start getting better.....

Kaer,the US economy would of collapse ,their nothing can stop the US economy,it is in beast mode,in America ,as long as living ,you have to spend money on something or someone else

yes Biden is responsible for the inflation, just as Trump is responsible for the worst recession in 70yrs and 20million lost jobs, goes both ways.

Wrong.

The economy under Obama was growing at a little less than 2% over his eight years in office. Under Trump, we're at 3% to 3.5% growth now, or in his term. That's a big increase, it means the economy is growing almost twice as fast under Trump as it did under Obama. One of the reasons higher economic growth is so important is if you can raise the economic growth rate to say 3% from 2%. That additional one percentage point may not seem like a big deal, but over a decade, that leads to about $3 trillion more federal and state and local tax revenues, because people if they're working, if businesses are profitable, they pay more taxes.

https://www.heritage.org/markets-and-finance/heritage-explains/the-trump-economy

If you want to blame Biden for worldwide inflation, then blame Trump for his recession and lost jobs.

You can't, not really, Biden was the one that allocated funds to Ukraine, Mexico, Europe, and NATO, Biden is responsible for overspending on the so-called new green deal and other public-funded pet projects that have gone belly up. Gas prices, No one told Biden to bend the knee and go to the Saudis, Venezuela or tap into our strategic oil reserves, the man could have pushed for more domestic drilling and using more US domestic natural resources, but he didn't, and here we are and the man, as a result, is hovering around 31% and it continues to sink. Biden choose to run the economy into a ditch, no one told or asked him to do it, he did that, and his admin.

US oil production is near record highs,

He said that officials at a US-Arab summit on Saturday did not discuss oil and that the Opec+ oil cartel nations would continue to assess market conditions.

Naeem Aslam, the chief market analyst at Avatrade, said: “The message is that it is Opec+ that makes the oil supply decision, and the cartel isn’t remotely interested in what Biden is trying to achieve.

https://www.theguardian.com/business/2022/jul/18/oil-price-rises-joe-biden-saudi-output-petrol-diesel-prices

Whatever this WH puts out, their messaging sucks. The people overwhelmingly blame Biden for every bad thing that is happening. It's funny, Biden and his admin want to take credit for every little positive thing and place the blame on others when something negative happens, this is Biden's political undoing.

That additional one percentage point may not seem like a big deal, but over a decade, that leads to about $3 trillion more federal and state and local tax revenues, because people if they're working, if businesses are profitable, they pay more taxes.

and yet the deficit gre by a record 7.8 trillion in 4yrs, twice as fast as Obama, make that so called more taxes obsolete

You can't, not really, 

oh ok so explain to us how worldwide inflation is Bidens fault, why worldwide oil prices are Bidens fault, this should be good

Nope. The inflation is due to the current unprecedented squeeze on the global supply chain, which is why the trend is global and not, um, like, Biden's fault.

finally somebody who know how world economics work, all a direct result of the pandemic,

the same as Trumps recession and 20 million lost jobs, the results of the pandemic,

Lets see the maga twist themselves into pretzels, making one president to blame for the repercussions of the pandemic while making another innocent LOL

Biden and his admin want to take credit for every little positive thing and place the blame on others when something negative happens, this is Biden's political undoing.

well at least he has 2 legislative achievements , $trillion infrastructure bill that builds stuff for all AMericans, and the gun reform bill, while not much its something in 20yrs.

Trump only legislative achievement t a 2017 trillion tax cut for the rich, thats it, which has shown to had very little effect on the average Americans wages or conditions, everything else he did was under executive order, same thing magas criticize Biden for LOL.

oh and that stock market Trump continued to harp on about is DOW is still higher under Biden

and yet the deficit gre by a record 7.8 trillion in 4yrs, twice as fast as Obama,

Yes, because unlike Obama that downgraded our military Trump started to heavily invest in it. As to why the Democrats love a weak military is beyond me, but it definitely pleases China, Russia, North Korea, and Iran for sure.

https://www.heritage.org/defense/commentary/yes-obama-era-cuts-left-us-too-weak-deal-multiple-global-menaces

oh ok so explain to us how worldwide inflation is Bidens fault,

To sum it up....

But Biden won’t have any of that. Per Capretta, his fiscal year 2023 budget increases domestic discretionary spending by 11%. If you believe Summers, one reason we have inflation at these levels today is because of Biden and the Democratic Party’s massive spending at the start of 2021. And until West Virginia Sen. Joe Manchin broke off negotiations, the Biden White House was still trying to get its “Build Back Better” plan passed into law, which would have amounted to another major expansion in government activity. Amazingly, the White House claimed that this would help lower inflation.

Realistically speaking, this White House will never breathe a word about spending cuts. Democrats in Congress will have nothing to do with any such notion, and the slightest hint of such an idea from 1600 Pennsylvania Ave. would prompt a backlash from progressives. Better to rail against the oil companies and suggest Summers is a liar.

https://www.aei.org/op-eds/inflation-is-bidens-fault/

well at least he has 2 legislative achievements , $trillion infrastructure bill that builds stuff for all AMericans, and the gun reform bill, while not much its something in 20yrs.

President Joe Biden has been engaging in extra-strength political spin by repeatedly taking credit for a reduction in the budget deficit. Yet this happened despite Biden’s policies, not because of them: Record-setting deficits during the COVID-19 pandemic were already expected to come back down to earth as the worst of the pandemic seemed to wane.

A more accurate way to see whether Biden has been good for the nation’s financial health is to compare where things stood when he took office with where they stand today. The comparison in the chart below makes it clear: Biden has repeatedly chosen to make things worse.

https://www.heritage.org/budget-and-spending/commentary/new-charts-reveal-harms-bidens-budget-busting-binge

Trump's only legislative achievement t a 2017 trillion tax cut for the rich, thats it,

It is important that they should get as much money as they can as job providers, but if you think poor people can create jobs, I owe you an apology. The rich provide the jobs, the raises, training, etc and liberals believe, well, we know what they think about rich people that provide and create jobs and opportunities.

which has shown to had very little effect on the average Americans wages or conditions, everything else he did was under executive order,

Good Trump or DeSantis and get rid of Biden's and make their own should congress fail to pass proper legislation.

oh and that stock market Trump continued to harp on about is DOW is still higher under Biden

It's a stark turnaround for the Biden stock market. The S&P 500 was up nearly 24% from Inauguration Day through the end of last year. 

But the combination of surging oil and gas prices following Russia's invasion of Ukraine, broader inflation worries resulting from continued supply chain disruptions and fears about aggressive interest rate hikes by the Federal Reserve have sent the market into a tailspin in 2022.

Still, the stock market fell about 3.4% at the onset of Jimmy Carter's presidency, just slightly more that the current Biden drop. Carter also had to cope with high inflation and geopolitical concerns, with the Iran hostage crisis occurring late in the third year of his first — and only — term in office.

Yup! More reason why Biden is getting the bejeezus beaten out of him this election cycle.

https://edition.cnn.com/2022/06/14/investing/joe-biden-stock-market/index.html

The U.S. central bank did what it was expected to do on Wednesday, raising its benchmark lending rate by three quarters of a percentage point as it steps up its battle to rein in runaway inflation.

The Federal Reserve raised the upper bound of its benchmark rate — known as the federal funds rate — to 2.5 per cent.

The official U.S. inflation rate topped nine per cent last month, while it’s currently more than eight per cent in Canada.

https://worldabcnews.com/u-s-federal-reserve-raises-benchmark-interest-rate-another-75-points/