StockTalk(6.29): Federal Reserve considers more interest rate hikes? Does the US economy need further tightening?
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Federal Reserve Chair Jerome Powell indicated that policymakers may raise interest rates in July and September to tackle rising inflation and a persistent labor market. He emphasized that although the policy is restrictive, more is needed. Powell also revealed that most policymakers expect to hike at least two more times this year.
The US economy continues to exceed expectations despite the Fed's tightening campaign, with sales of new homes climbing to their fastest pace in over a year. Bank of England Governor Andrew Bailey and European Central Bank President Christine Lagarde have echoed Powell's concerns about underlying inflationary pressures, suggesting that further rate increases may be necessary. The markets are responding with bets on future Fed hikes this year.
What is your opinion on the current state of the US economy and whether or not the Federal Reserve should continue to raise interest rates? How will the US economy respond to further tightening by the Federal Reserve?
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Bobi2206 : Take interest rates to 7% come on
Btan : Make it 10%
ZnWC : US FED rate hike is a blunt tool to curb inflation. The restriction policy try to curb demand to all industries which may trigger recession. When that happens, companies will layoff to cut cost making widespread unemployment. Indicators like CPI, PPI, Unemployment rate and claim are slow to reflect inflation and very often overtightening damage the economy and cause stagflation.
On the other hand China the 2nd largest economy doesn't seem to be affected by inflation. Instead Central Bank started to reduce interest rate and introduced stimulus packages (also known as money printing) to help revive the economy to avoid recession.
The better method to curb inflation is targeted approach such as price ceiling on certain critical items, expand supply chains (or remove protectionism) and increase productivity (to reduce cost). Instead of layoff to cut cost, the better way is to retrain the workforce to increase productivity.
杰曼 : yes, he should, everyone is feeling the impact. A matador is always needed to divert and tame the bull from crashing anywhere recklessly.
Kopikarp : Further tightening through raising interest rates is expected to slow down economic activity, possibly impacting hiring and adding pressure on inflation. It could also lead to tighter credit conditions for households and businesses, which may weigh on economic growth. However, the exact magnitude of these effects is uncertain. As the economy adjusts to these changes, there may be increased volatility in financial markets, and sectors sensitive to interest rates might be affected. Overall, further tightening could create a challenging economic landscape, but the resilience of the US economy could help mitigate these effects.
Gianna_xoxo : The fed is sinking the market especially the crypto
Market for there own personal gains , example they got rich off shorting all the tokens named as unregistered securities there the real inside trader