Fed predicts big slowdown in economy and rising unemployment as it battles inflation

[libertybele]

IMHO things are going to come to a screeching halt and there's not going to be a soft landing.  Let's see if Putin goes nuclear, they can always blame him for all that ails us.  God help us all!

Fed predicts big slowdown in economy and rising unemployment as it battles inflation

U.S. unemployment rate seen rising to 4.4% from current 3.7%

The “pain” Americans are likely to endure from higher U.S. interest rates is a tepid economy in 2023 and rising layoffs and unemployment, the Federal Reserve said Wednesday.

The central bank raised a key U.S. interest rate that influences the cost of borrowing for the fifth time this year. The rate hikes are meant to slow the economy enough to bring down the highest inflation in 40 years.

In a major speech last month, Fed Chairman Jerome Powell warned the public it would experience “some pain” as a result of the bank’s more aggressive effort effort to roll back inflation.

A slowing economy would curb hiring and induce more layoffs as businesses faced the prospect of slower sales. The Fed wants to cool off a scorching labor market in which worker shortages are rapidly driving up wages and adding to inflation.

In updated forecasts, the Fed predicts the economy will grow at a meager 0.2% annual pace this year and a lackluster 1.2% next year — well below the outsized 5.7% gain in 2021.

The unemployment rate, meanwhile, is forecast to rise to as high as 4.4% in 2023 and stay there through 2024. The current jobless rate is 3.7%, just a few ticks above a half-century low.

Historically such sizable increases in the unemployment rate foreshadow a pending recession. And a rising number of Wall Street DJIA, 0.49% economists believe the U.S. will suffer a mild downturn sometime within the next year.

Senior Fed officials acknowledge a recession is possible, but they are still suggesting publicly that they can pull off a so-called soft landing. That’s a Goldilocks scenario in which the economy slows just enough to slash inflation without triggering a recession...........

https://www.marketwatch.com/story/fed-predicts-big-slowdown-in-economy-and-rising-unemployment-as-it-battles-inflation-11663783584?mod=home-page

[mystery-ak]

I'm confused...how does

Fed predicts big slowdown in economy and rising unemployment as it battles inflation

raising the interest rate help inflation..??

[DefiantMassRINO]

That's what the rate hikes are designed to accomplish.  People aren't getting laid off quickly enough, and businesses aren't closing fast enough, yet.

Traditionally, October is the start of Whacking Season - end of year layoffs so companies can start the next year leaner and meaner.  It also gets called Downsizing, Pink Slipped, Rightsizing, Synergies, etc.

Will there be a new euphemism for getting $h!t-c@nn3d added to the lexicon in 2022?

[Bigun]

I'm confused...how does  raising the interest rate help inflation..??

Raising interest rates causes the economy to slow down thus tamping down inflation.

[mystery-ak]

Raising interest rates causes the economy to slow down thus tamping down inflation.

So having an economic boom can lead to inflation?....I should have paid attention in my economics class many moons ago...lol

[Bigun]

So having an economic boom can lead to inflation?....I should have paid attention in my economics class many moons ago...lol

When you continually spend what you do not actually have (put the printing presses in overdrive) eventually you have to pay the piper yet many still believe that giving control of our currency to an international banking cartel was a good thing.

https://twitter.com/russellybarra/status/1572616086708953089

[DefiantMassRINO]

They are crashing the economy into a brick wall to reduce the amount of gas that car will need in the future.  They crash the car to destroy its need for more gasoline.

Raising rates, under monetary theories, fights inflation by:

- reducing the supply of money
- increasing the cost of money
- increasing the value of money
- causing deflation
- causing reduced demand

... fewer dollars chasing goods and services, increases the amount of goods and services each dollar can buy, provided supply remains constant.

It does not create more chickens nor more eggs, which would be the supply side economics solution to reduce the cost of chicken and eggs.

This is why Harry Truman was never able to find a two-handed economist ... economists are always hedging their forecasts because there are variables outside their control ... on the one hand, this ... on the other hand, that.

[mystery-ak]

Elizabeth Warren Slams Fed’s Interest Rate Hike as ‘Extreme’

Joshua Caplan 21 Sep 2022

Sen. Elizabeth Warren (D-MA) issued sharp criticism directed at the Federal Reserve over its decision to once again raise interest rates by 75 basis points.

“.@federalreserve’s Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment.I’ve been warning that Chair Powell’s Fed would throw millions of Americans out of work — and I fear he’s already on the path to doing so,” Warren, a member of the Senate Committee on Finance, wrote on Twitter following Federal Reserve Chair Jerome Powell’s announcement regarding the benchmark interest rate hike.

Earlier Wednesday, Powell said he would boost the rate by 75 basis points for the third consecutive month as part of an effort to combat red-hot inflation, raising fears that the move could halt growth and cause additional issues for the U.S. economy.

“We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses,” Powell stated. “Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy.”

“Higher interest rates, slower growth, and a softening labor market are all painful for the public that we serve. But they are not as painful as failing to restore price stability,” he added.

Powell hinted at the increase earlier this month, saying the Fed would continue to act “forthrightly, strongly” to combat inflation.

more
https://www.breitbart.com/economy/2022/09/21/elizabeth-warren-slams-feds-interest-rate-hike-as-extreme/

[mystery-ak]

Dow closes 500 points lower after the Fed delivers another aggressive rate hike
Samantha Subin
Carmen Reinicke

Stocks fell in volatile trading Wednesday after the Federal Reserve raised rates by 75 basis points and forecast more sizable rate hikes ahead in its fight to tame surging inflation.

The Dow Jones Industrial Average slid 522.45 points, or 1.7%, to close at 30,183.78. The S&P 500 shed 1.71% to 3,789.93, and the Nasdaq Composite slumped 1.79% to 11,220.19.

The S&P ended Wednesday’s session down more than 10% in the past month and 21% off its 52-week high. Even before the rate decision, stocks were pricing in an aggressive tightening campaign by the Fed that could tip the economy into a recession.

Stocks were volatile as traders parsed through the rate decision and the latest comments from Powell’s press conference. At its highs, the Dow was up more than 314 points.

The Fed raised rates by the widely expected 75 basis points and said it expects its so-called terminal rate to reach 4.6% to fight persistently high U.S. inflation. That’s the rate at which the central bank will end its tightening regime. The central bank also indicated that it plans to stay aggressive, hiking rates to 4.4% by next year.

“You can only steer the ship towards the storm for so long, but eventually there comes a time when you need to batten down the hatches and with the Fed’s third consecutive 75 basis point rate hike over the past four months, market participants should be looking for cover to weather the upcoming storm,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

Treasury yields popped on the news. The 2-year rate, which hit its highest level since 2007, popped up to 4.1%. The 10-year rate jumped to about 3.6% at the highs of the day.

more
https://www.cnbc.com/2022/09/20/stock-market-futures-open-to-close-newshtml.html

[libertybele]

Elizabeth Warren Slams Fed’s Interest Rate Hike as ‘Extreme’

Joshua Caplan 21 Sep 2022

Sen. Elizabeth Warren (D-MA) issued sharp criticism directed at the Federal Reserve over its decision to once again raise interest rates by 75 basis points.

“.@federalreserve’s Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment.I’ve been warning that Chair Powell’s Fed would throw millions of Americans out of work — and I fear he’s already on the path to doing so,” Warren, a member of the Senate Committee on Finance, wrote on Twitter following Federal Reserve Chair Jerome Powell’s announcement regarding the benchmark interest rate hike.

Earlier Wednesday, Powell said he would boost the rate by 75 basis points for the third consecutive month as part of an effort to combat red-hot inflation, raising fears that the move could halt growth and cause additional issues for the U.S. economy.

“We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses,” Powell stated. “Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy.”

“Higher interest rates, slower growth, and a softening labor market are all painful for the public that we serve. But they are not as painful as failing to restore price stability,” he added.

Powell hinted at the increase earlier this month, saying the Fed would continue to act “forthrightly, strongly” to combat inflation.

more
https://www.breitbart.com/economy/2022/09/21/elizabeth-warren-slams-feds-interest-rate-hike-as-extreme/

The GOP as they go into the midterms need to blatantly remind America how we got to this point and how we were much better off before Joe took office. Remind people that our unemployment rate was the lowest in history, we were energy independent, shelves were stocked, etc.  Also remind them of Joe's might blunder in Afghanistan!

[LMAO]

The GOP as they go into the midterms need to blatantly remind America how we got to this point and how we were much better off before Joe took office. Remind people that our unemployment rate was the lowest in history, we were energy independent, shelves were stocked, etc.  Also remind them of Joe's might blunder in Afghanistan!

And also the border crisis

Can anybody name anything, just one thing, that has been a  plus from this administration for the country?


An area where I see a lot of Republicans hitting Democrats hard on is crime. Ron Johnson has been hitting Mandela Barnes very hard on his past statements and the positions he’s taken when it comes to crime. And crime is one of the top concerns of the American people

[DefiantMassRINO]

 

First woman Vice President.
First person of color Vice President.
First invisible/disappearing Vice President.

[libertybele]

And also the border crisis

Can anybody name anything, just one thing, that has been a  plus from this administration for the country?


An area where I see a lot of Republicans hitting Democrats hard on is crime. Ron Johnson has been hitting Mandela Barnes very hard on his past statements and the positions he’s taken when it comes to crime. And crime is one of the top concerns of the American people

I happened to catch Rubio's ad the other day. I think it is a very weak ad in my opinion.  He needs to have video footage of what the left is doing, not just make some claims.  Nothing in the ad to sway someone to vote for him.  I think he needs to draw in DEM voters and IND voters.  The GOP voters have likely already made up their minds; he's held his seat for a while now.


www.youtube.com/watch?v=6levbAlvlf8

[catfish1957]

Watch what happens after 2 more big Fed bumps......

Pedo Joe and Yellen won't know what hit them.

[rustynail]

The people need More Checks.