The Fed Walks Back Its Interest Rate Cut Guidance (Yet Again) | Axel Merk
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- čas přidán 12. 06. 2024
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In its latest guidance released this week, the Federal Reserve is holding interest rates steady for now.
The Federal Funds rate will remain unchanged at 5.25%
But the Fed did lower its rate cut forecast for 2024 to just 1. And it raised its 2025 rate cut expectations upwards from 3 to 4.
It largely did this because its outlook on inflation is notably more optimistic than in previous months.
Wall Street certainly liked what it heard, with the S&P jumping over 1% on the news and Treasury yields falling.
But does this slightly more optimistic view actually change anything?
To find out, we sat down right after Fed Chair Jerome Powell's press conference with fund manager & Fed watcher Axel Merk to get his real-time assessment.
#federalreserve #interestrates #inflation
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THERE IS NO PIVOT, QT IS ON!
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Mr Taggart I always got to give you some props you make the best content out there you analyze while you're interviewing summarizing you have a good format. Keep up the good work
I wish the Fed would quit talking about rate cuts until they have killed inflation. I also wish they would leave dot plots to the nation’s kindergartners.
Not gonna happen. Manipulated markets.
The Phillips curve isn't something that works when they pull on the wrong end. As the gov measures inflation the only effect the Fed's current policy can have is to raise it.
Agree. I want a new inflation target of 0.0. Not 2
They aren't serious about reducing inflation. They just don't want it to be 9-10 because it makes their errors too obvious.
“But we need the volatility to make money” Wall Street
Good job from Axel. Excellent perspectives and sensibilities.
You people are obsessed with the FED like drug addiction
40 years of rate cuts to zero
It’s a scam. So that’s the first problem. Now the next 30-40 years are most likely rates up
Good luck spenders and savers are feeling good next 30 years
The Fed and Powell could care less about whether incentivizing savings over loose money and credit and debt. They're determined to go back to ZIRP.
Another thing, I’m sending an invoice to the White House to reimburse my college tuition since I did not have loan forgiveness but instead was responsible.
Really enjoy these Adam 🙌
Axel is right on target. Keep on bringin him back!
Shouldn't be any rate cuts. They are going to look really stupid cutting when inflation is 2x their stated target.
Agreed. Why should they? They are still printing money, with the other hand. Once again - they be NO [significant] rate cuts, until a black swan lands. Period.
If you believe in the lag effect, doesn't it make sense to cut rates before hitting the target 🎯 because it takes time for the cuts to work their way thru the system
@jofieraymond6528 its been 2 years. The lags are already baked in and it shows it is not sufficient, we need to raise to 7-8% at least to kill inflation. We need a crash in the market and a recession to kill aggregate demand and change the psychology of the market participants and the consumers. Then they can cut rates.
It is 7 times their inflation target, it is 13-15% per ShadowStats which uses the older less manipulated measure which itself understates inflation.
Axel is a great guest every time.
I think it was Matt Piepenberg that pointed out that small businesses used to be able to pay out up to $20,000 with out reporting that to the IRS. The law changed to $600. So now small businesses are creating LLC’s and EIN’s and the Fed assumes those are new companies creating jobs. It’s not. They are the same mom-and-pops but they had to register their business differently.
Not a thing, simply because Congress keeps spending
My opinion of why stocks are still jumping higher even though the FED comes out with a hawkish report is because the government is using extra money which they don't have to flip up the markets to make it look like a good economy now you have to look at what the real investors are doing and they have been pulling out keeping money on the side they see the cycle. But I definitely think the government has some people that just want to deceive the people as much as possible
100 % agree, it is a complete scam designed for suckers. Stock market is free capital for
big companies.
I have been a real estate broker in the SF Bay area for 35 years ( top 1% of buyer's agents in 2014) and I believe if the rates go down so will the prices of residential real estate because buyers will wait to see if they can get a better rate. Prices will start to go down and buyers will wait to see if they can get a better price and a better rate. I have watched this happen before. Buyers move like a school of fish. As more properties come on the market as rates go down, buyers will have more to choose from and will sit back. No urgency to buy. Better for them to wait for better rates, more properties to choose from and lower prices.
I bet you home prices there will go up if the Fed drops rates. Sellers will raise their prices because they can get away with it.
It wasn’t Bush that lowered the lending standards- it was Clinton’s Community Reinvestment Act which also allowed for the bundling of mortgages to be sold.
I caught that too. It was Clinton.
Such a smart man, and wow his English is incredible.
The real problem I see on the horizon is PE being too big to fail. Every single day I'm seeing a new article on a company, sector, industry going private or being bought up by PE, a highly unregulated, non transparent multi trillion dollar hidden part of the economy that is leveraging all the other parts of the markets (Pensions, 401k, ETFs, bonds etc) to continue taking control of anything they don't already have a hand in in the markets.
There's no way this doesn't blow up in our faces at some point and I can't imagine the Fed or the government not stepping in given how absolutely massive/systemic this part of the economy has become.
And guaranteed the people at the top of it all will try to walk away scott free without any consequence, billions richer for engineering the demise
What's the corporations that are buying up masses of amounts of neighborhoods and homes that are distorting the prices. If Congress who pull their head out of their butts and make that bill a law to where the corporations have to sell off all of their single-family home residences within 10 years. It would flood the market and make housing way more affordable because prices are set to margin. The bill would not allow corporations to buy any more single-family homes
I'm loving this coverage of interest rates
We need daily updates from Axel at this point :)
Brilliant discussion (Again) gentlemen, thank you
Inflation is analogous to a cancer, while recession is surgery. Most people would opt for surgery.
how can they cut rates when fiscal policy is so recklessly loose especially in a so-called good economy? ONE TRILLION in new gov debt every 100 days is super loose. seems they need to raise rates to cut inflation that is well north of targets even if gov figures are not manipulated as many suspect
The markets are more blind then forward looking. This year they have moved in expectation of cuts. Yet no cuts. Now they know there will be possibly one rate cut this year and the market continues to move up.
Adam, I hate what happened to you with W...ion and I know this sounds trivial but-- Change the color of Your Background! The green is old and tired. Yesterday, Danielle Martino Booth wore a stunning aqua dress on FOX. Go watch the video if you think color doesn't matter. She rocked it.
I personally like the neutral and calm green background ❤
nobody watches the old Wealthion channel now.
@@TurnkeyTradingI do. Not everything they put out but some good guests.
Some thoughts on buying a house or sitting on sidelines:
I bought a small house and if I average 3.9% appreciation since I bought it, it would sell all 420k. If it averaged 3.4% appreciation, it would sell at $360k. If you are thinking about buying low and selling high. What appreciation is acceptable?
Is new buyer ok with 2.9%, just 1/2 a percent less appreciation than 3.4%? In 3-4 years you can break even.
If waiting for a 20% price drop before willing to buy, are you ok with another 10% drop after buying? Or are you demanding a temporary drop just for you to get in? And resumption of appreciation right after you buy?
Rates do nothing to help with rent or food inflation, corporate driven. We know algorithms price rent raising inequality.
Really dig the drab camo green background. Goes really well with my introverted hermit lifestyle.
Excellent interview. Please do more of these.
Down from 3 rate cuts not 6. The Fed suggested 3 rate cuts. It was the street that suggested 6 rate cuts.
Yes, I said “the market” expected 6-7 cuts back at the start of the year
Bring Axel Foley back !
This guy actually looks like Axel Foley's nemesis in the original
@ 6"20 says Jam-master Jay "It's the process that matters." What process? There is no transparency into it, I am not convinced that they know what the hell that they are doing. If they have a model, subject it to model validation review standards that the Fed and other supervisors wrote in 2011 (I was involved in that, albeit as a grunt), as with the banks that they oversee.
AXEL YOU NEED TO FOLLOW THE CONSTITUTION !!!!!!!!
What is that all about ?? DId I miss something ?
A friend asked: When have the FED made gradual rate cuts? EVER?
I encourage you to interview Louis Navellier. He has a lot to say about the Fed.
Note they NEVER try to increase supply to make prices go down
@ 37: more debt means more economic growth IF banks are allowed to fail, so runs don't turn into financial crises.
@ 20:40 Lucas Critique ("Macroeconomic and Reality", 1981): all policy tools eventually become ineffective, so here is the result of reliance on interest rates in the absence of attention to money supply and fiscal profligacy, as well as micromanaged banking supervision that ignores the fact that implicitly bailouts result in slow bleeding bank failures and massive financial crises vs. the good old bank runs of yore.
Adam I'm confused about the comparison to the 1970s when inflation got crazy I was a kid but my stepdad was very well read and politically driven and followed all of that stuff closely I don't remember there being a lot of economic growth any stimulus and a lot of economic activity in spending that drove up inflation at that time so was inflation driven up then because no one was purchasing and people were raising prices to accommodate the lack of sales or am I missing something?
@ 15;40 Again back to supervisory model validation standards heaped on banks - you need benchmark or challenger models...especially when your model is not wholly based on a statistically or theoretically derived rule and is subjective.
I think it was Danielle Di Martino Booth who predicted lower rates would bring housing prices down because people who want to sell will finally put it on the market and move so you’ll get a glut of homes.
"Throwing money at the problem (Housing market affordability)"
Or credit rather? But then, credit is what is used as money. But then, somewhere underneath all that credit, there must still be some money, right? Right? Or?
Anybody else thinking about the "co-incidence" involving supply chain disruption that took 30 yrs to build & 2 yrs to intentionally break despite all the political theater.
Inflation hurts the middle class the most? How about senior citizens who don't have family and living on a fixed income of $12,000 a month or less? I think it hurts them a bit more because people in their 60, 70s,and 80s aren't exactly being snapped up by employers and a lot of them also have health issues.
Cliché ‘Higher for longer’ may have to be changed to ‘High for longer’ with the Fed continually stating no interest rates hike for foreseeable future…
Let's go!.
It’s simple they’ve printed too much money and the money has to go somewhere . So all those index funds through 401k are buying because they have to .
AXEL WHY NOT SHOW THE NOT SEASONALLY ADJUSTED DATA WITH THE BOGUS ADJUSTED DATA ? THEY ARE CROOKS IS WHY .
7th, 13 June 2024
My prediction is that the wheels will come off the wagon in August and it won't be a recession it'll be a depression
Meh. Presidential-selection-year, in play. More extend/pretend, till next year....
@@TeddyBess it'll be increasingly harder and harder to prop up this Ponzi scheme
There might be some kind of financial breakdown that would be a grey and not a black swan, like some pension fund, large shadow banker, money manager, etc. and so on going under.
He is talking out of both sides of his mouth. Standard playback to discredit the Fed, while avoiding admitting the Markets role in all of this and how incredibly wrong they have been.
There is no ‘market’. There’s a totally manipulated casino. The FED buys the debt. The FED buys the market. And the SEC allows the big players to screw retail at every turn. There. Fixed it.
%Rates R 2ndary. Credit Xpansion is bottom line 4 debt system! With Gov @ $1T/100days & Freddie opening $1T home equity loans to markets we may be at hockey stick for all assets against all currencies.
"Cash curry" lol
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THERE IS NO PIVOT, QT IS ON!
Does Adam Taggart ever take a day off?
Hardly ever it feels like...
I can imagine how much Adam is underwater
They will cut rates next month. They should have already cut. Employment is just horrible.
4% according to the BLS. Very low unemployment.
The Fed and Jerome Powell lost credibility with me months ago. They really have botched this and I think they should stop with all the news conferences.
My comment is short on deep analysis and technical back up but this market and economy makes no sense. No matter how happy one is with it's increases, it's not made sense for more than a year. A recession should clearly be present.
Jay != Arthur Burns but = Monte Burns cranky old miser from The Simpsons who won't give the junkies on the street their fentanyl.
Fed needs to step out of market manipulation and let the market take care of the market.
The stock market is not the economy. There is no lag effect, it's OK to admit your wrong.
Sorry to be so cynical, but Jay is so hungry to cut, and so afraid of being Arthur Burns, that he is willing to crash the economy.
Jay will cut regardless of the data. His legacy will be worse than Burns.
Kashman talks to much for a Fed head he should stick to his day job, else join CNBC or become a market strategist somewhere.
Economic investigator Frank G Melbourne Australia is still following this informative content cheers Frank
Algorithm
Axel seems pretty smart in the market, but he is completely clueless about politics. 30 minutes in and his political assertions have ruined the discussion
OurName4Freedom WS William Shatner, yours danielhall4freedom