Depending on the extent of damage I’d expect some of the FOMC members to be out publically talking their game plan, whatever it is, and trying to prop-up any teetering markets. They’ve been sidelined in the days leading up to this week’s meeting,
“Blackout Periods Federal Reserve policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Federal Reserve blackout periods, which begin the second Saturday preceding a Federal Open Market Committee (FOMC) meeting and end the Thursday following a meeting unless otherwise noted.” Source
Comments
(Excerpt) The Federal Reserve could opt to raise its benchmark rate by 50 basis points if a more aggressive approach to taming inflation is needed, Raphael Bostic, president of the Fed’s Atlanta branch, told the Financial Times in an interview. Bostic stuck to his prediction that three quarter-point increases starting in March would be the most likely scenario, though stubbornly high consumer prices could justify a more robust rate rise …
“Every option is on the table for every meeting,” Bostic said on Friday. “If the data say that things have evolved in a way that a 50-basis-point move is required or be appropriate, then I’m going to lean into that . . . If moving in successive meetings makes sense, I’ll be comfortable with that,” he told the newspaper.
Story from Bloomberg
Source
Excerpt from Reuters - The U.S. Federal Reserve should start raising interest rates from near zero in March and can comfortably raise them to 1.25% by the end of the year, San Francisco Federal Reserve Bank President Mary Daly said on Monday.
"If you get to that point, so say that's the reality, that's quite a bit of tightening, but it’s also quite a bit of accommodation left in the system because the terminal rate of interest is 2.5%, so you are supporting the economy, not pulling away the punchbowl completely and causing disruptions, but you are taking away some of the extraordinary accommodation we have been providing," Daly said in an interview with Reuters Breakingviews. "I think that balance is the appropriate thing to do with the uncertainty we face."
Looks like they’re trying to talk some of the overheated markets down without having to really do much heavy lifting (raising rates quickly). I try to hedge my bets being up there in years. Still have a bit of exposure to longer dated investment grade bonds in the event the Fed pushes too hard and economy falls off a cliff. Not recommending that for anyone else. Just the way I tend to think about hedging risks.
Agree, bonds are not a good investment with inflation far above what they yield.
This is a very difficult environment for bonds.
The fixed-income portion of my portfolio is in short-term bonds and a Stable Value fund.
I really dislike bonds now but it wouldn't be prudent to be invested entirely in stocks at this life stage.
I have to remind myself that a bad year in bonds (investment-grade, short to intermediate term)
is often comparable to a bad day for the U.S. stock market.
(Excerpt) Right now, I think four 25 basis point increases this year is appropriate," Harker said during an interview with Bloomberg TV. "But there's a lot of risk here," including the risk that inflation is worse than expected, or that it eases faster than Fed officials expect, he said.
Here
Interviewed February 1
(Excerpt) St. Louis Federal Reserve President James Bullard on Tuesday said he favors lifting rates at the U.S. central bank's meeting in March and likely again in May, but he pushed back against the idea of kicking off the coming tightening cycle with a half-percentage point hike. "I don't think a 50-basis point hike really helps us right now," Bullard said in an interview with Reuters … </i1
https://www.reuters.com/business/feds-bullard-does-not-think-half-point-rate-hike-really-helps-us-reuters-2022-02-01/
Hard to say. Sounds like he wants to start out slowly (quarter point) and ramp up later. The interview was posted to Twitter. I don’t have access to it. But there should be some longer passages in the WSJ in coming days. I’ll add some of those when I can.
https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
Powell is in a corner.
At some point psychology & momentum will turn. I guess a few of the most overpriced have already turned south. Some crypto and the ARKK stuff. (Yes ARKK may well be on the rebound - after something like a 70% fall from peak).
Full disclosure: I’m an invested bear.
Feb 10 (Reuters) - “St. Louis Federal Reserve President James Bullard said on Thursday that he has become "dramatically" more hawkish in light of the hottest inflation reading in nearly 40 years, and he now wants a full percentage point of interest rate hikes over the next three U.S. central bank policy meetings.
“Within minutes, Bullard's view became the market's view, with rate futures contracts now fully pricing an increase in the Fed's target range for its policy rate to 1%-1.25% by the end of its policy meeting in June, with some bets on an even steeper rate hike path.”
Reuters
As if gold / miners needed any more reason to slither lower. Gold’s only off $4 - but p/m miners off 2.50% at 3 PM.