March 22nd. FOMC FED Funds Rate Guess - Poll

[rwdflynavy]

Before the bank implosion, I'd be in the .25% increase. Now I think they will leave it alone this time.

 

[pb4uski]

Given the Feb CPU-I result against the banking silliness, I think they ll stay the course and do 25 bps like they did last time.

 

[Montecfo]

I did not vote, but I find it a bit strange to say "inflation is still high, Fed needs to keep raising." That tactic will always result in an overshoot.

Rates were raised with unprecedented speed last year, especially after the time that we now know that rates peaked. And the clear trend now is down.

It really is time to allow these dramatic increases to percolate through the economy and assess the result before more hikes, in my view. It takes 6-18 months according to experts for the effect of a hike to be felt.

Especially with banks under pressure. What is next to break?

I assume they will do a face saving 25 bp and pause.

 

[jim584672]

Magic 8 ball says .25%.

 

[erkevin]

So we are "voting", the Fed is going to abide by our decision........

 

[pb4uski]

....Especially with banks under pressure. What is next to break? ...

Break? BS! Nothing really broke. A few of the thousands of banks in the US screwed up and have caused a panic in the banking sector. Nothing broke other than perhaps consumer confidence in banks due to social media coverge of SVB and Signature, but it wasn't caused by the Fed inceasing interest rates.

Actually, inflation has been unusually strong the last 2 months so it is nowhere near tamed and the Fed needs to stay the course on getting inflation under control.

 

[Montecfo]

Break? BS! Nothing really broke. A few of the thousands of banks in the US screwed up and have caused a panic in the banking sector. Nothing broke other than perhaps consumer confidence in banks due to social media coverge of SVB and Signature, but it wasn't caused by the Fed inceasing interest rates.



Actually, inflation has been unusually strong the last 2 months so it is nowhere near tamed and the Fed needs to stay the course on getting inflation under control.

You should probably re-read my post.

 

[pb4uski]

You should probably re-read my post.

I did. When someone says "what is next to break" it suggests that something broke to begin with and when it is written in context with a discussion of further increasing interest rates it suggests that the increase in rates was part of the cause... or at least that is what some of the talking heads have suggested.

It's silly. Nothing broke and there has been a lot of overreaction.

The reality is that the favorable moderation and declines in prices seen in the second half of 2022 have reversed and for Jan/Feb of 2023 inflation has been coming back so it is prudent to nip it in the bud.

 

[Montecfo]

I did. When someone says "what is next to break" it suggests that something broke to begin with and when it is written in context with a discussion of further increasing interest rates it suggests that the increase in rates was part of the cause... or at least that is what some of the talking heads have suggested.



It's silly. Nothing broke and there has been a lot of overreaction.



The reality is that the favorable moderation and declines in prices seen in the second half of 2022 have reversed and for Jan/Feb of 2023 inflation has been coming back so it is prudent to nip it in the bud.

Banks failing is normal and fine. I think most folks would disagree. They failed but I guess did not "break" in your view.

But you missed-again-the most important part: we do not yet know the impact of the massive and unprecedented rate hikes undertaken to date. Because of the well known time lag.

Accordingly we have no way to know what damage has been done to the economy, and not just banks but small business and employment.

Who knows what non-breakage could be in our future?

 

[Freedom56]

I think the Fed will continue to monitor deposit outflows from regional banks to the large banks over the next week. The yields on bonds for some regional banks are as high or even higher than what we saw in 2008. I can't believe the Fed isn't monitoring the yield spreads between the large banks and regional banks. The economy and markets cannot function without a stable banking system. Banks can only function if consumers have confidence in them. If there are no more bank failures this weekend Powell may just leave rates alone and hold for an extended period of time. If there are more bank failures this Friday, I would expect Powell to panic and cut rates immediately.

 

[shafer9]

Interesting. Like the screenwriter William Goldman said about Hollywood, “nobody knows anything.”
I’m guessing .075 and hoping I’m wrong.

 

[Car-Guy]

Europe hikes rates by .50

More support for JP to do the same?

https://www.reuters.com/markets/europe/ecb-rate-hike-plans-clouded-by-financial-turmoil-2023-03-15/

 

[ShokWaveRider]

Europe hikes rates by .50



https://www.reuters.com/markets/europe/ecb-rate-hike-plans-clouded-by-financial-turmoil-2023-03-15/

Europe's inflation is also at ~8.5% not ~6%

 

[Car-Guy]

^^^^
So maybe he uses that to just raise rates by .25.

 

[Montecfo]

Looks like Credit Suisse got a lifeline, that helps EU. They are behind US with higher inflation and likely more risk due to their energy situation.

 

[Kwirk]

I'll guess 12.5 bps. The fomc will want to minimize blame for any further deterioration of banks while not allowing the impression that they're giving up the fight against inflation. Obviously, I don't have a clue.

 

[Car-Guy]

I'll guess 12.5 bps. The fomc will want to minimize blame for any further deterioration of banks while not allowing the impression that they're giving up the fight against inflation. Obviously, I don't have a clue.

Not sure I've ever seen such a small move. (either way) 25bps is the smallest, I think.

 

[Kwirk]

25bps is the smallest, I think.

I agree that 25 appears to have been the smallest. I just can't decide between 0 and 25. It's highly unlikely, I suppose, but maybe they'll feel the same way.

 

[Toocold]

I think 25 with a forward guidance of pause afterward.

 

[audreyh1]

Well we will find out soon!

It’s been quite a week.

 

[MarieIG]

Initially I would have guessed .50 basis points, but after recent developments, I have revised my guess downward. I reserve my right to change my mind, or otherwise waffle around with the tenacity of a weathervane, up to and including March 23, 2023.

 

[Car-Guy]

Initially I would have guessed .50 basis points, but after recent developments, I have revised my guess downward. I reserve my right to change my mind, or otherwise waffle around with the tenacity of a weathervane, up to and including March 23, 2023.

The financial winds are certainty blowing in all different directions. Two weeks ago I was sure it would be .50 and now I'm thinking .25 and I'm not sure about that. I could probably throw darts at a dart board and be just as sure. Hey wait a minute, does Powell have a dart board?

 

[dmpi]

I think he almost has to say 25 bp. 50 bp would further stress the banks and 0 bp would cause investors to panic. Where we go from here will depend on his statement. He's going to stress that inflation is under control and the banks that are in trouble are isolated cases and the Fed is ready to step in with additional liquidity.

 

[SecondCor521]

I think he almost has to say 25 bp. 50 bp would further stress the banks and 0 bp would cause investors to panic. Where we go from here will depend on his statement. He's going to stress that inflation is under control and the banks that are in trouble are isolated cases and the Fed is ready to step in with additional liquidity.

I think he'll use some variation of "The Fed will continue to be data driven" at least five times between his speech and in the Q&A.

 

[latexman]

I bet the Fed stays put today. No increase, no decrease.