Fed suggests rate hikes in 2023

The main question when looking at the rise in inflation is whether it is “transitory” – for instance, related to temporary supply issues and labor shortages as demand rebounds. Even today as the Fed increased its headline inflation expectation to 3.4%, one full percentage point higher than its projection in Mar 2021, the Fed maintained that it is transitory. However, the question is hotly contested by economists and observers. Billionaire Bill Ackman, for instance, last month said on inflation: “I think it’s not temporary...it’s hard to roll back wages once you roll them up [to keep up with prices].” This may also hold true for the prices of products and services – once prices go up for an extended period, they often don’t go back all the way down. More 6Pages analysis can be found in our 3 Shifts Edition: Inflation & bubble concerns grow louder as the Consumer Price Index rises (link here: https://lnkd.in/dH8FPkB)

Here's a little recap from yesterday's Fed meeting. Rates: still near zero Asset purchases: still at least $120 billion per month The real news came from the FOMC's quarterly economic projections. A dot-plot of officials' expectations suggests the Fed could lift interest rates twice in 2023. That compares to the previous estimate of hikes arriving after 2023. Fed Chair Jerome Powell cautioned that the estimates should be taken with a "big grain of salt." Still, the update suggests that accelerating inflation could prompt policymakers to pull back on their accommodative policy earlier than last anticipated. More @ Business Insider below! #economy #interestrates #fed #fomc #monetarypolicy

Are you ready for rate hikes? Barron's Lisa Beilfuss on Wednesday covered the latest news on the Federal Open Market Committee. She wrote, "Seven officials now expect to lift interest rates next year, up from four officials in March. More important: All but five members think rates will need to increase in 2023. In March, only 7 thought so, with 11 members expecting to keep rates pinned at zero. Markets have been expecting no change in rates before 2024. "And more important still is the fact that five officials now see rates at 1% or higher in 2023, suggesting rates won’t just rise sooner but faster.?" Read more at the link below. What do you think about the news? #finance #economy #inflation

The Federal Reserve had to raise its inflation expectation by a full percentage point to match the reality in the economy. They clearly want to keep it under control but aren't about to raise rates just yet, still calling it transitory (not permanent). They also raised the GDP growth they expect this year, to 7% - and growth is coming with inflation... #money #linkedinfinance #economy Lions Financial

This CNBC headline captures well the growing disconnect between? (i) the Fed's CONVICTION on both "transitory inflation" and that it; not being time to taper; and (ii) FOUNDATION in the form of economic forecasts (and, I would add, realities on the ground). #economy #markets?#fomc #fed #federalreserve #inflation