Quote:
Originally Posted by 2000cs
Remember last summer when he said inflation was transitory? Tried to jaw-bone it away. Same thing this summer, trying to jaw-bone it with expectations of higher rates. My guess is after Sept’s increase, there will be fewer but I don’t expect a decrease. Remember that the FED is still undoing QE.
In the near term both the IRA and the student loan forgiveness are inflationary. The resumptions of payments on remaining loans will be non-inflationary. So on balance not sure how the FED will handle those, but it might give them impetus for an extra 25bps.
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Yes I remember and they have acknowledged they got it wrong last year. I don’t think jawboning is any more viable of a strategy now than it was last year though so I don’t think that’s the plan.
I think they will continue to unwind QE and ride rates up to 4% or higher and hang there for quite a while unless there is a severe recession. I do think after September, they will be able to pull back on the level and frequency of hikes, but won’t let up entirely until inflation appears settled back down close to 2%.