Does Ben have to hike rates again?

[blazespinnaker]

I am pretty sure he does

I am generally cautious about making strong statements, especially ones about fiat currencies and the fed but I believe Ben must continue to hike rates.

If he doesn't, he could be sparking a free fall in the USD (the message the markets are sending to him: is you're freaking us out). If this happens,
the long end of the curve will skyrocket, mortgage rates will dramatically increase, and the housing market will meltdown in the most terrible way.

Price stability is the #1 goal of a central bank and the fed (if not the chairman) must appreciate that. If HeliBen reveals to be soft on inflation at a time of massive global imabalances... well, that will be the equivalence of a flamethrower in this market.

And I don't think the fed will let him do it (it isn't really up to heliben, remember .. he is just one vote, and a noob at that) and so there will be another rate hike.

Though, I do see him continuing to test the mettle of the market with experimental language about a pause.

But, at the end of the day, this language is less to warn the market and more to test it.

[jk]

when is the next fed meeting? next month?

i don't think ben or any other fomc member will make any decision before the day of the meeting. if current market trends continue in a straight line, then your analysis may hold. but there will be a lot of market action as well as many pieces of economic data between now and then.

[blazespinnaker]

Well, I think they'll probably make a decision a bit earlier.

Being the fed chair is a consensus building task, the reason the fed generally votes 'as one' is to avoid confusing the market. However, in order to do that, the chair generally makes the rounds and gets a sense of what everyone wants.

He usually makes his case as he talks to them, but in a way that lets him save face in case they don't want to vote the way he does.

Once they know how they want to vote, then as a group they have to confer to let each other know how the vote is likely to turn out so that they don't vote in the minority and look like fringe lunatics.

I disagree with this whole 'economic indicators' thing they have got going. I think the issues are structural, and the fed knows that.

They want to continue hiking but they are worried about shoving the economy into recession and getting blamed for it.

I guess all I know if they pause on the rates I'll be buying commodities because obviously we will have a weak dollar policy in the states.

[jk]

"They want to continue hiking but they are worried about shoving the economy into recession and getting blamed for it.

I guess all I know if they pause on the rates I'll be buying commodities because obviously we will have a weak dollar policy in the states."
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if they are worried about shoving the economy into recession, how will they know when to stop or how fast to go? they have to be following some indicators to know how close they are to precipitating a recession.

we already have a weak dollar policy. the only question is: "how weak how fast?"

[jeffolie]

The next meeting is June 29th.

They will not raise another .25 pt.

[Jim Nickerson]

This article suggests there may be a pause.

http://www.safehaven.com/article-5176.htm

Jim

[blazespinnaker]

Fed Funds Futures Market posts a greater than 50% chance of the fed hiking rates in the next meeting.

[Jim Nickerson]

Fed Funds Futures Market posts a greater than 50% chance of the fed hiking rates in the next meeting.

I often hear one authority or another making comments about how rate hikes are going to evolve based on the Fed Funds Futures Markets, just as you made your statement.

Where does one access the data that allowed you and others to make these statements, and once one sees the data, does one have to make calculations from it, or does something just state: > 50% chance of the fed hiking rates at next meeting?

Enlighten me please.

Thanks.

Jim

[blazespinnaker]

Not sure where you can get a free version, but I'm sure it's out there.

I get my updates from a couple of my online brokerage accounts, bmo nesbitt burns is one.