The Federal Reserve is bluntly obvious. They have resorted to this technique for the last six months. One month prior to their scheduled meeting, they take turns addressing the media. They are using the media as their BS, bully pulpit. Here is a sample from October. Of course, we know that they did nothing at the meeting with rates, but BS to the nation.
Philly Fed President, Patrick Harker:
"Absent a stark turn in what I see in the data and hear from contacts...I believe that we are at the point where we can hold rates where they are."
Fed Chairman, Powell:
"Additional evidence of persistently above-trend growth, or tightness in the labor markets is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy."
Atlanta Fed President, Raphael Bostic:
"I really do try to keep people focused on what inflation is still at 3.7%. Our target is 2%. We have to get a lot closer to the 2% before I would consider any relaxing of our posture."
Fed Chairman, Powell:
"Financial conditions have tightened significantly in recent months, and longer-term bond yields have been an important driving factor in this tightening. We remain attentive to these developments because persistent changes in financial conditions can have implications for the path of monetary policy."
Minnesota Fed President, Neel Kashkari:
"It is certainly possible that higher long-term yields may do some of the work for us in terms of bringing inflation back down, but if those higher long-term yields are higher because their expectations about what we're going to do has changed, then we might actually need to follow through on their expectations in order to maintain those yields."
Dallas Fed President, Lorie Logan:
"If long-term interest rates remain elevated because of higher term premiums, there may be less need to raise the fed fund rate. However, to the extent that strength in the economy is behind the increase in long-term interest rates, the FOMC may need to do more."
Fed Reserve Member, Christopher Waller:
"While there is some basis for expecting inflation will continue to fall, let me remind you, as I have done repeatedly, that we have seen a string of good inflation reports evaporate multiple times in recent past. So, I will be watching the next several reports for clearer indications that inflation is on a trajectory to 2%."
Boston Fed President, Susan Collins:
"With rates in restrictive territory, I do expect that payroll growth and economic activity more generally will slow in the coming months."
Our Two Cents
What the Fed members did not address or mention is this: Interest of US debt is now over $1 trillion. This is destroying our nation. This growing negative now consumes 15.9% of the entire budget. They never admit or address their role in the "boom and bust" economic policies instituted by them. They make interest rates artificially low for the boom and then raise them high for the bust. They will be the reason as to why the global community will seek to end the dollar as the world's reserve currency. It is why we say, "End the Fed!"
Our View on Inflation
Workers at Chipotle earn $20 bucks an hour in California. We predicted last December that in 2023, workers would strike, mainly because of inflation. We see many more strikes in 2024 with this news.
Is your oil a little low in your vehicle? Well, a can of oil that used to sell for less than a dollar, now costs $5.99 Ouch! Remember the Christmas Hess truck? When they raised the price from $2.99 to $4.99, I thought no one would buy. I was wrong. Flash forward to today. The Christmas truck goes for over $42. Are you kidding me!? Inflation is not only not going away, but worse, it is ingrained. When you check your oil and decide on a different present at the gas station, as your vehicle fills up, don't let the lower price fool you. The winter blend for gasoline is cheaper to produce, but OPEC still controls 40% of the product and they want higher pricing. The two wars will not help the situation.
The recent rally in the market should stall. It is at resistance. The dollar is central for the next market move. We will have more on the Fed and our economy and inflation next week. Peace.
