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Fed signals possibility of 6 to 7 rate hikes thru 2024

JD_co
in Other Investing
"The Federal Reserve on Wednesday telegraphed it could hike rates six to seven times by the end of 2024, illustrating the central bank’s optimism that the COVID-19 recovery will progress well enough for the Fed to tighten its easy money policies in a few years.

The policy-setting Federal Open Market Committee still held interest rates at near-zero in its updated statement, but said it had advanced talks on paring back its asset purchase program.

Since the depths of the pandemic, the Fed has been absorbing about $120 billion a month in U.S. Treasuries and agency mortgage-backed securities. But Fed officials have said in recent weeks that by the end of the year, the economy will likely make the “substantial further progress” needed for the central bank to begin slowing the pace of those purchases."

https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-september-2021-141145429.html


Can't wait earn a nifty 1.5% on my savings after another 3 years, while inflation eats my breakfast, lunch and dinner for me.

Comments

  • carew388carew388
    I'm hoping 2 to 2.5 % after 3 years. For me 2% is better than 1 basis point for my idle cash !
  • LewisBraham
    edited September 2021
    I find such predictions so far out in time regarding the Fed to be somewhat absurd. A lot can happen between now and the end of 2024.
  • carew388carew388
    +1 It's more wishful thinking on my part.
  • hank
    edited September 2021
    I happened to watch the whole show. Powell acknowledged year-over-year inflation is running well above their targeted 2% rate (now projected at north of 4% for the year as I recall). Also, Powell took a lot of heat during the press conference (and was clearly uncomfortable) over apparent “conflicts of interest” involving the 2 Fed Bank Presidents and also relating to some muni bonds he owned at the time the Fed decided to prop-up the muni market with purchases.

    Overall, quite a show!

    Agree with the others re the dismal returns on cash. Of course, for every action there’s an equal and opposite reaction. Rates rising may be accompanied by some surprises we’d rather not have.
  • carew388carew388
    +1
  • Sven
    How would the tapering and higher interest rates impact your bonds and stocks?
  • carew388carew388
    Higher interest rates would likely cause my bond and stock mutual funds to decline. Lately, I've been eliminating oef purchases and using etfs instead. The only buy and hold fund in my Fidelity account is PRWCX ;I would sell the rest if rates resumed higher.
  • stillersstillers
    edited September 2021
    Sven said:

    How would the tapering and higher interest rates impact your bonds and stocks?

    Here's one take on it...

    https://www.cnbc.com/2021/09/23/heres-what-will-happen-when-the-feds-tapering-starts-and-why-you-should-care.html

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