Showing posts with the label Inflation

The Real Risk is not Inflation: it's Civil War

We note the Federal Reserve now expects to "end its pandemic-era bond purchases in March (2022) and pave the way for three quarter-percentage-point interest rate hikes by the end of 2022.."  While we agree the Fed is correct in observing that, for whites, "the economy no longer needs increasing amounts of policy support," specific sectors and demographics require ongoing support. The key skill of a central bank in the current environment is identifying these demographic sectors and providing targeted, non-inflationary support. There are a number of ways to do so, but, given the lack of relevant African American diversity on and at the Board, we do not expect the Fed to be familiar with these techniques. (We suggest they see our Maternal Mortality Reparation Facility for Black Women. ) We continue to believe that the recent inflation spike is due to fear and greed-based labor and supply chain disruptions resulting from the unprecedented and ongoing COVID crisis. This

Trump's Tariffs on China will Mainly Hurt the Fed by Hongcheng Chen, Creative Investment Research

The Federal Reserve’s Federal Open Market Committee (FOMC) meeting statement on March 21, indicated that the Committee voted for a quarter-point increase in federal fund rate. (See: ) The Fed seemed to signal, by this rate hike, that a more robust  economic outlook, strengthened, at least in part, due to fiscal policy (tax bill), provides a solid base on which to tighten (increase interest rates) monetary policy more aggressively in the future. The FOMC also sought to cling to a strategy in 2018 , according to the statement , that “ supports strong labor market conditions and a sustained return to 2% inflation .” Top  FOMC  considerations : Inflation targets and the labor market This cautious stance diverged from market expectation in a surprising way: the market seemed to expect more . The accommodative monetary policy and moderate rat