actions work through financial conditions.” So said Jerome Powell, chairman of the Federal Reserve, late last year, referring to the causal chain of monetary policy. As interest rates rise, tighter financial conditions lead companies and consumers to cut spending, prompting economic slowdown and lower inflation. The past ten days have illustrated a less desirable causal chain: from higher rates to aThese stormy financial conditions pose a dilemma for the Fed.
Second, instability is itself a drag on the economy. As confidence cracks, firms try to preserve capital. Banks lend less and investors pull back. Measures of financial conditions—which include interest rates, credit spreads and stock values—have tightened sharply in the past ten days. Eric Rosengren, a former president of the Fed’s Boston branch, has compared it to the aftermath of an earthquake.
A rate rise would also demonstrate that the Fed can chew gum and walk at the same time. In an ideal world officials should be able to manage financial stability while keeping inflation in check. With a combination of deposit guarantees, a new liquidity facility and support from bigger banks, a framework is now in place to shore up America’s financial institutions.
Powell tomorrow.
it would suggest they blow in the wind and have a hard time picking a course and sticking to it....
seems like a great reason to keep buying...good lord help us
It's understandable to feel unsure about what the future holds. Hang in there, stay positive, and let's hope for the best! 💪
Here is the decision, keep the interest rates where they are and save some banks even the ones that should go, or let inflation run wild and crush the working class.
They’ll raise 25bps in a desperate attempt to reclaim a shred of credibility. And it will blow up in their faces. They’ll continue to redefine words like bailout, recession and QE. The QE on the other side of this will be enormous.
Sans the giant swastika over the entrance.
🤔
Chaos is guaranteed, whichever way you choose.
I choose both
How long will you continue to lie to people... The American and European economy is getting incredibly bad. you can't hide it from people... banks are crashing... inflation and interest rates are rising.. people don't trust banks anymore
'Market chaos' is a hyperbolic term for 'make the evil banks suffer like everyone else'
EndTheFed
Federal reserve is a joke. No sound evidence that inflation is curbed or contained through monetary policy.
'Counterintuitively, a rate rise may be somewhat reassuring. A pause would suggest that the Fed, hawkish in tone and action for the past year, really is worried. An increase, by contrast, would signal that it thinks the crisis is under control.'
So, we can not address inflation because of another badly run and regulated bank for the wealthy corporatesocialism OccupyWallStNYC They have done this dirty so many times Time to fess up. Here's the receipt
I remain convinced that banks are not just sitting on their Treasury assets. They are loaning them to short sellers, packaging them into instruments to to trade off near term bonds vs long term, and many more ideas. The Fed needs to be sure this isn't true.
Turkey's greatest earthquake He sees tomorrow!!!..the greatest earthquake in a century. ProphetElvisMbonye
False Dichotomy. J-POW is basically a drunk driver behind the wheel with a 0% chance of catching a DUI.
That creature made at jack all island