Will Sanity Return To Federal Reserve Policy? Maybe!

Market pressure may just be the cause for a pause.  

Speculation abounds about Federal Reserve Policy for interest rate increases. Every expert seems to have a different take on forecasting what the Fed will do to combat inflation. And unlike the Supreme Court, there are no leaks, only published vague hints.

So, is there hope for some sane monetary policy? We may have reason to hope.

Fundstrat has an opinion: The Federal Reserve is starting to realize that inflation is a smaller "black hole of pain" than previously thought, and a pivot or pause on rate hikes could lead stocks to rally more than 16% by the end of the year, according to Fundstrat's head of research Tom Lee.

Read more here for this positive upbeat prediction: The Fed is realizing that inflation is a smaller 'black hole of pain' than previously thought, and stocks could rally 16% by year-end, Fundstrat says (yahoo.com)

Recession Alert! Bloomberg Calls It 100% Certain! Prepare!

Bloomberg has predicted the absolute certainty of a US economic recession in 2023, most likely before October. The economic model may mean the Federal Reserve has gone too far in raising interest rates in their thus far futile attempts to constrain inflation.

No model is certain, just an educated guess disguised as a mathematical projection by experts. Have faith, these experts are not always right. But this one seems pretty dire any way you look at it, especially when we have a flock of other experts parroting similar outlooks. 

Your best bet? Beware and Prepare! The next Fed meeting November 1-2 may give us some direction. 

The stock market is highly volatile right now. Be careful! Watch for a 'risk-off' flight to quality. And CD's are becoming more and more attractive for safety and income. 

Bloomberg: https://www.msn.com/en-us/money/markets/forecast-for-us-recession-within-year-hits-100-in-blow-to-biden/ar-AA133nzh

But be sure of one thing, when the rate hikes stop, there will be a few months of wait and see, then we might just see one great stock buying opportunity.

Future Fed Forecast. Interest Rate, Inflation, Housing, Employment Pedictions

Inflation and Interest Rates are the two main concerns for most working class people taking money out of their pockets, taking food out of their mouths, and too often taking hope out of their lives. 

Will the Fed succeed in bring some relief? Not for quite a while. Expect interest rates to continue to rise for the rest of 2022 and into 2023. Inflation won't be whipped for a couple quarters, unless we get pushed into a deep recession. Housing prices will continue to drop and the unemployment rate slowly rise.  

NerdWallet has some good insights: https://www.nerdwallet.com/article/finance/timeline-for-lower-prices-and-rates

Be aware and prepare! Pay off those high interest rate credit cards, save up some emergency funds, and keep a few bucks on hand, there will be a sale on some quality dividend stocks.  

The Fed Will Pivot - First They Must Find a Way to Save Face.

There is no question the consensus of the Federal Reserve Board is to slow rate hikes and quickly restart a quantitative easing program to avoid a 2008 style international financial crisis.

No Question.

So, will they do it? Of course, just as soon as they can manufacture a plausible reason for their sudden reversal. Ah ha, here we go. October 13 brings the newest inflation report for September. Prepare for it to be spun like a yo-yo doing walk the dog. Whatever the number is, it will be 'positive news on inflation, proof the Fed is winning the battle' or something similar. 

But that's ok. The USA economy will benefit, and so will all the citizens, except maybe the Democrats who have been in charge of the country for the last couple years. 

Here's a good take from MarketWatch. (Long but good read)  

Investors are dismissing --- or maybe even welcoming --- signs of cracks in the global financial system. Here's what's at stake. - MarketWatch

Will the Fed finally get it right, or are we doomed with a deep recession starting soon?

The only way out is to reverse these interest rate hikes and again began a program of quantitative easing - and do it soon! 

The US Dollar is near the stratosphere and headed higher at a rocket pace. International economic disruption could be just a Fed meeting announcement away. 

Business Insider has it right. Soaring US Dollar to Spark a Fed Pivot, but That's Not Enough for Stocks (businessinsider.com) 

And what you really need to know?

The real rate of inflation.  Alternate Inflation Charts (shadowstats.com)