Oh, snap! Fed announces MORE rate hikes are coming, instead of cuts????

[i]Photo above - The median home price in Stinson Beach (a San Francisco neighborhood) reached $4.5 million in May. The monthly mortgage payment would be $26,200 at today's rates. Annual property taxes would be another $54,000. Don't overlook the 6-foot-high fence and iron gate, to keep the homeless and squatters out of sight, and out of mind You can't put a price on security![/i]

Lissen up! The president is speaking. That would be Mary Daly, president of the Federal Reserve Bank of San Francisco, that is. “The Fed’s latest rate late projection means another hike this year is officially expected.” per The Hill, in the link at bottom.

Presumably, that means an increase about 15 minutes after the election is over, right? There’s no way the Fed, with all its proclaimed independence, is going to mess with the final couple of months of the President's re-election campaign, is there?

Remember, this is the same independent and objective Fed that earlier promised SIX RATE CUTS in 2024. That may have been due to an expectation that Trump would already be behind bars, and Biden cruising to victory. Now it’s “No soup for you!” to quote the iconic line from Seinfeld.

In related news the S&P 500 index (more broadly based than the Dow) hit an all-time high yesterday. Again. Evidently investors really, REALLY don’t want to buy T-Bills if the rates are going to go up again. That money has to go somewhere, you know.

I imagine the phones lines are humming between campaign headquarters in the west wing and various Fed officials now. Should we expect Fed Chairman Jerome Powell to walk back Mary Daly’s comments, gazing absentmindedly past the cameras and noting “there is no specific plan . . .”?

Yes, we all get it. There is no specific plan. Speeches promising rate cuts become speeches warning us to hold on for more increases. Housing prices continue to soar. Inflation in general is still about twice what it was projected to be, despite the government using its preferred index which excludes most food, fuel, and housing costs. This smells like rigged game, and the government STILL can’t win it.

Here's an analogy. Imagine your nana is in the hospital. She’s been prescribed 12 medications for her fever. The doctors tell you “Perhaps we can start cutting some of these back”. Then the next day they change their minds. “Oops . . . . we're going to increase the dosage. This is the only medicine we actually have, you know . . .”

You'd insist on a second opinion then, wouldn't you?

I’m just sayin’ . . .

~Rate hikes may not be over yet, Fed official warns (thehill.com)~

whowasthatmaskedman · 70-79, M

This is the story of Ouroboros. The snake eating its own tail. One part of the US economy is feeding on the tail and the stomach is getting indigestion. Stop thinking the Fed is controlling this. The Real estate market is driving it and the Fed is responding by raising rates, because its the only weapon it has. And its a poor one for the job. The right lever is to cure what is driving prices up..😷

SusanInFlorida · 31-35, F

@whowasthatmaskedman you nailed. this is the danger of a government agency which is "politically neutral" and isn't obligated to respond to congress, the president, or the voters at large. they're like european royalty, in their own minds.

whowasthatmaskedman · 70-79, M

@SusanInFlorida See, there is where we digress. In my view, the problem came about in the first place because the Clinton administration weaponised the real estate business as a wealth creation/investment vehcile with the ninja loans, which took America and the world into the global financial crisis 1.0. and didnt learn a thing through it into the Bush 2.0 era.. So now the cry is "deregulation" which is leaving the corporate wolves on the sheep pen. If the regulation had been in place to prevent this pillaging of the market, regular homeowners wouldnt face the competetion. But this is still a sympton of a much larger economic problem America faces..😷