The precondition for knowing when the Federal Reserve stops raising rates

[dansus021]

I don't think Powell wishes to break things to bring the inflation down, with him not getting the desired results this present a big dilemma for both the FED and the Government,

They tried to increase rates but you can't stop inflation when you're adding to the existing supply, when increase in supply is the main cause of inflation.

They're pressing the gas pedal in a moving car while at the same time gently applying breaks and wondering why it isn't stopping.

Agreed in fact the recent news said "Powell says more ‘restriction’ is coming, including the possibility of hikes at consecutive meetings" - https://www.cnbc.com/2023/06/28/powell-say-more-restriction-is-coming-including-possibility-of-hikes-at-consecutive-meetings.html after all the target of the FED is 2% of inflation rate Yearly but it seems like darkangel11 said "pressing the gas pedal in a moving car while at the same time gently applying breaks"

it not gonna work if the FED still printing money the inflation will keep increasing if the interest rate is too high it would the world if put interest rate is too low the us dollar will lose its value.

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[adaseb]

Yes they will raise rates and they want moderate unemployment and not high unemployment. We get high unemployment and they will have to cut rates to stimulate economy and we will repeat this entire cycle in a few years and this time we will get double digit inflation and bread will cost $10 a loaf. This is not the answer.

We need employment to slow down so we can get some stability in inflation which we don’t have now.
Inflation will bottom next month and then it’ll keep going up and most likely end at 4-5% which is nowhere near 2% target.

[BitcoinTurk]

Yes they will raise rates and they want moderate unemployment and not high unemployment. We get high unemployment and they will have to cut rates to stimulate economy and we will repeat this entire cycle in a few years and this time we will get double digit inflation and bread will cost $10 a loaf. This is not the answer.

We need employment to slow down so we can get some stability in inflation which we don’t have now.
Inflation will bottom next month and then it’ll keep going up and most likely end at 4-5% which is nowhere near 2% target.

Increasing the unemployment rate by raising interest rates will certainly not be a correct solution. Although the households will spend less in case of an increase in the unemployment rate, the production problems and insufficiency that may occur due to unemployment will also cause the households to spend more. In addition, if the unemployment rate increases people will only spend more limitedly and will not avoid paying a price above their value for the products they need.

Although inflation seems to be under control now compared to last year, I think it has not reached a completely controllable level. For this reason, it will be very difficult to achieve the 2% target set in the short-term period. Is the base effect or is it a different reason that you think that the inflation rate will decrease next month?

[Wind_FURY]

I don't think Powell wishes to break things to bring the inflation down, with him not getting the desired results this present a big dilemma for both the FED and the Government, it is not a good sign knowing fully well that the election is coming, if the economy is not doing well what are they going to use to campaign, but the job of the FED is to make sure they have the monetary system under full control. I have a feeling they are going to raise the interest rate by 0.25%, the last time I checked there is 85% chance of this happening before the next quarter and with rumour of Ukraine-Russia war coming to an end we are likely to inflation coming down and likely doge recession

I believe no one wants to break the economy to bring inflation down, but the same as the other economic events when inflation went high, causing a recession through monetary policy was necessary to curb demand and bring inflation down. It's something like an economic reset to flush the economy of excess money in circulation. Smaller money supply = smaller economy, then it rebuilds and grows again as the Federal Reserve expands the money supply through QE.

If Powell refuses to tighten and just leave inflation to be always high, then inflation will cause a recession for him as it slowly  exhausts the people's savings until they are left with none. That would be a worse kind of recession because inflation is still high = Stagflation. But it won't end in Stagflation because Powell still needs to curb inflation. If he tightens during a time when people don't have any savings, then that could cause the worse economic condition = Depression. It would he harder to rebuild from such a condition. It's better to cause a recession now while the people still have their savings.

[Unbunplease]

As inflation has fallen to 3%, the period of rate hikes should end very soon. Yes, a 0.25% rate hike is now possible, but the Fed could make a surprise move by announcing a pause. In fact, they're talking about 2% - but it's not really 2%, right? So expect some surprises in the near future

[Wind_FURY]

As inflation has fallen to 3%, the period of rate hikes should end very soon. Yes, a 0.25% rate hike is now possible, but the Fed could make a surprise move by announcing a pause. In fact, they're talking about 2% - but it's not really 2%, right? So expect some surprises in the near future

Look at the blue line in the charts in OP. There never truly was a fall in inflation until a phase of high unemployment has already happened. Unemployment has currently remained very low, then that means demand is still right their in the U.S. economy, which could mean re-inflation if the Federal Reserve starts pausing rate hikes.

Plus to those people who believe that the U.S. will escape a recession, read Fitch's downgrade, https://www.fitchratings.com/research/sovereigns/fitch-downgrades-united-states-long-term-ratings-to-aa-from-aaa-outlook-stable-01-08-2023

That's a symptom of financial deterioration, and the effect of the U.S. government's debt burden.

[Wind_FURY]

If you're in the United States, It's probably best to start saving the most of what you can save from you salary and control/stop purchases for things that you don't need. When unemployment rapidly rises, it usually leads to a recession. The other problem, is high inflation. Recession + High Inflation = Stagflation. If true, then you probably need to hold some of your savings in a Store of Value asset.



This would also probably be just another wrong projection, but it wouldn't hurt to save and HODL Bitcoin.