Yahoo Finance: Fed's Bullard calls for two more rate hikes in 2023
https://finance.yahoo.com/news/feds-bullard-calls-for-two-more-rate-hikes-in-2023-173320962.htmlExcerpt:
Federal Reserve Bank of St. Louis president James Bullard said Monday he thinks the Fed needs to hike interest rates two more times this year because economic growth is surprisingly robust and inflation isn’t slowing fast enough.
He favors these hikes "sooner rather than later" without being specific about a date.
"I think we're going to have to grind higher with the policy rate in order to put enough downward pressure on inflation," he said while speaking Monday in Fort Lauderdale, Fla. "I'm thinking two more moves this year, not exactly sure where those would be. But I've often advocated sooner rather than later."
Bullard offered the most extreme view of several regional Fed presidents who spoke Monday about the direction of interest rates.
[Photo of 'smiling'. Hardy-har-har...]
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Last edited Mon May 22, 2023, 07:05 PM - Edit history (2)
Year-over-year inflation is coming down. But recent inflation isn't, or just a tiny amount over the last several months.
Rolling 3 month averages thru April, latest 6 values (annualized)
CPI: . . . . 4.5% 3.3% 3.5% 4.1% 3.8% 3.2%
Core CPI: 5.0% 4.3% 4.6% 5.2% 5.1% 5.1%
It looks like the Core CPI has flatlined for several months. (The Fed uses the Core measures for projecting future inflation because energy prices swing so widely from month to month).
More: https://www.democraticunderground.com/10143072605#post5
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The core PCE is much the same picture.
https://www.democraticunderground.com/10143067288#post1
Core PCE - 3 month rolling average and 6 month rolling average
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Both core measures (core CPI and core PCE) look stubbornly stuck at more than double the Fed's 2% target. In case people who just look at the year-over-year (12 months) numbers are wondering why the Fed is being such a meanie. Actually, the Fed has been kind of soft at the last 2 meetings because of the banking situation.
Even at a "modest" 4.5% inflation rate, the purchasing power of the dollar is cut in half in just under 16 years, and into a quarter in just under 32. Wages have not been keeping up, which is typical of high inflation periods. And the purchasing power of nest eggs are being eviscerated.
Considered the most reliable gauge of wages and salaries:
https://www.democraticunderground.com/10143067288#post4
So real wages and salaries have finally turned up, slightly, in the last 2 quarters.
But the last reading is still 3.7% below the peak, and 3.4% below the Q1.2021 value.
Edited to add: The Fed have had a 2% inflation target for many decades. It's not some secret or something they suddenly came up with. So why some people are mad that they are actually striving towards that goal -- from where we are at now which is about 4.5% inflation (more than double that target) -- is completely and totally beyond me. And invoking all kinds of right-wing conspiracy theories about it. Sigh 
If it was a Republican administration fighting inflation, and the Fed did just three milqeutoast quarter point interest raise raises over the past 5 months when inflation was more than double their long- long-anounced target, people would be screaming about how they were going easy on the repuke administraton and only going through the motions /Edit (the last more-than-quarter-point rate hike was December 14 )
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The next PCE report (thru April) will be released Friday.
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I can read my screen just fine without everything being all bold. In fact, I find it almost as irritating as all caps.
