For the rest of the year, there was only a slight change in the market’s expectations of rate hikes or cuts following the CPI release.
Ahead of the CPI inflation release, the market perceived there was a 14 percent chance of a quarter point hike by the Fed on September 20.
After the CPI report, the odds dropped to 11 percent. Similar small changes took place in the November and December oods.
Target Rate Probabilities November 1
The changes for November were only 1 percent or so.
Target Rate Probabilities December 13
For the December meeting, the odds changed from 1 to 2 percent.
The CPI data had almost no impact on market perceptions of rate hikes or cuts by the Fed.
CPI Rises 0.2 Percent, Shelter Again Accounts for Most of the Increase
For the 18th straight month the price of shelter has risen at least 0.4 percent. For a year, analysts have predicted not just a slowing pace of increases, but falling prices.
For further discussion of the CPI data, please see CPI Rises 0.2 Percent, Shelter Again Accounts for Most of the Increase.
Interest rates don’t do anything to curb inflation and in most cases only increase it.
Higher interest rates curb speculation on borrowed money. Much of inflation is speculative, and non productive. This greed does absolutely nothing for humanity. Rising interest rates make the price of greed more expensive.
I can’t find a single, living human being who believes the bogus government numbers on inflation. They must be politically motivated.
I know they’re calculations for eggs inflation was WAY OFF. Like at least 200%.
Hey Casual. If you could snap your fingers and eliminate every Central Bank in the world, including the Fed, it wouldn’t make a significant difference. Whether you fix interest rates or let them float, would also make little difference.
And if Central Banks were not here for people to complain about, people would just complain about something else.
Because the world is always in a state of turmoil and full of problems. The key is how you react to that turmoil and those problems. Some people worry, fret and complain and end up hiding in their survival shelters. Others look at problems and see an opportunity to fix them or make things better. And those problem solvers are often richly rewarded for their solutions.
Dang! Its yet another good week for my oil investments. Of course, I continue to sell into strength and raise by cash position a bit each week. God Bless America, land of opportunity!
“Others look at problems and see an opportunity to fix them or make things better.”
I think that’s exactly what CO is trying to do. I’m not sure that I agree with his solution, but we both “might” agree that aspects of how the Fed runs the show are very problematic.
Yammering for months on end that $11T worth of free money inflation was transitory all the while holding to a near ZIRP policy was just bat sh_t crazy.
Sorry, I started to do some of that complaining that annoys you.
Totally agree though. Problems can be viewed as opportunities.
From a purely investment position, it is a good time to now sell oil into strength than to buy into strength. You had a good run PaPa
As I have said many times recently, I HAVE been selling into strength and raising a little cash as oil ran from below $70 to above $80 and stocks responded.
Still, my cash is less than 15% after all that selling. I will keep selling if prices keep increasing (as I expect) until I hit 25% cash. That is typically my upper limit for cash, unless something unusual happens.
I did the same last year as oil ran up to $120. By then I was almost 30% cash. Then started to deploy the cash once oil dropped back under $100. It could happen again.
Please note, oil stocks are not my entire portfolio. Roughly half of it. But they are my main focus, as everyone here can see. Up till 2020, tech had been my big focus. The switch to oil happened in 2020.
God bless Monte Carlo, a place of vast opportunities.
Opportunity is everywhere. You just need to get in the habit of looking for it. Too many here only want to look for something to complain about. All that gets you is bitterness. Which is not how I want to live my life.
The FED is not a public Central Bank. It’s a consortium of private banks and essentially collusion. It has some politically restraining mandates which it ignores but overall basically a bunch of banksters running the country
Nope. Not completely private either. As usual, the US decides to do many things different from every other country. Not necessarily better or worse; just different.
“ The Federal Reserve is unique among central banks. By statute, Congress provided for a central banking system with public and private characteristics. The System performs five functions in the public interest. The framers of the Federal Reserve Act purposely rejected the concept of a single central bank.”
We would be better off setting a permanent interest rate and dissolving the Fed. Some rate that splits the difference between investment and savings. 4% seems like a good number. The truth of the matter is the lack of stability in rates and everything else has been caused by Fed policies. The world isn’t gonna if we have a permanent interest rate policy.
You’d have as much success with that as those that try to fix exchange rates.
Biden needs to replace Powell with someone who will at minimum, begin massive QE of mortgage backed securities and additionally subsidize home builders. We need a policy of plenty, not a policy of restrictionism. If the Republicans had any vision they would demand the same.
Gotta agree, Biden needs to give away lots of money to everyone and all the time. Whee, More Money Today is easy!!!
Higher interest rates are favored by Biden voters, who have money in CDs. Lower rates only benefit the rich, the above average and Wall Street (few votes). Biden will keep rates as high as possible to win a 2nd term, making him a “successful” president in the eyes of history. One term presidents are losers. Once his 2nd term is cemented, Biden and his boys will drop the rates back to zero again as we cant have $1 trillion a year interest payments forever. Watch it happen. 🙂
Making interest payments at any rate of interest is no problem as long as debt holders are willing to accept freshly created money. It’s fungible.
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We have CD’s ande are NOT a Biden (or Democrat voter).