{"id":56843,"date":"2022-04-28T08:00:34","date_gmt":"2022-04-28T12:00:34","guid":{"rendered":"https:\/\/www.ino.com\/blog\/?p=56843"},"modified":"2022-04-26T15:48:58","modified_gmt":"2022-04-26T19:48:58","slug":"lets-get-serious","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2022\/04\/lets-get-serious\/","title":{"rendered":"Let's Get Serious"},"content":{"rendered":"

Federal Reserve Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting on May 3-4. It will likely get more aggressive in its fight against 8%-plus inflation. It\u2019s going to have to because just as fast as the Fed is trying to bail water out of the boat, the White House and Congress are determined to keep pouring it in.<\/p>\n

\u201cIt is appropriate in my view to be moving a little more quickly\u201d to raise rates than the Fed has recently, Powell said<\/a> last Thursday at an International Monetary Fund event. \u201cFifty basis points will be on the table for the May meeting,\u201d he said. That would double the 25-basis point increase at its March meeting, which now looks relatively puny compared to the yield on the 10-year Treasury, which is rapidly approaching a three-handle for the first time since 2018. <\/p>\n

St. Louis Fed president James Bullard, suddenly the most hawkish voting member on the Fed\u2019s monetary policy committee, said he thinks a 75-basis point hike is more appropriate. However, he conceded that \u201cmore than 50 basis points is not my base case at this point.\u201d Still, 50 bps is a lot better than 25 bps in bringing the Fed\u2019s target closer to the so-called neutral rate, which is when Fed policy is neither accommodative nor restrictive, and the Fed is nowhere near that (although no one really knows what the magic number is). With six more meetings to go this year, including May\u2019s, 50 bps at each meeting would push the fed funds rate above 3%.<\/p>\n

That seems awfully aggressive, given the Powell Fed\u2019s generally dovish inclinations. Still, it may have no choice given that the Biden Administration and its acolytes in Congress are pushing for even more stimulative policies, not less, as they face a growing likelihood of an electoral wipeout in November. Indeed, according to one of its leading lights, the problem isn\u2019t that the government isn\u2019t spending too much; it\u2019s that it\u2019s not spending nearly enough. And naturally enough, that spending has no effect on driving up inflation, in their eyes. Inflation may be a problem, but it\u2019s surely not Washington\u2019s fault.<\/p>\n

Last week the New York Times<\/a> handed a platform to Massachusetts Senator Elizabeth Warren. In a piece entitled \u201cDemocrats Can Avoid Disaster in November,\u201d Warren argued that the problem isn\u2019t too much spending by Washington but too little.<\/p>\n

\u201cWhile Republican politicians peddle lies, fear, and division, we should use every single one of the next 200 days or so before the election to deliver meaningful improvements for working people,\u201d she wrote. \u201cIf we fail to use the months remaining before the elections to deliver on more of our agenda (emphasis mine), Democrats are headed toward big losses in the midterms.\u201d<\/p>\n

In Warren\u2019s mind, the \u201curgent challenges we face are climate change, income inequality, and systemic injustice.\u201d Inflation barely warrants a mention from her, except to attribute it to \u201cpandemic disruptions to global supply chains and Vladimir Putin\u2019s war in Ukraine.\u201d Not to mention greedy corporations, who are \u201cjacking up prices to boost their profits.\u201d She would punish them by instituting a \u201cglobal minimum corporate tax.\u201d<\/p>\n

And, of course, she lobbies for student loan debt cancellation, which she claims Americans support by \u201ctwo-to-one,\u201d with the minority presumably including those saps who took out loans and were dumb enough to pay them back. Moreover, she says President Biden could cancel student loan debt by executive privilege \u201cwith the stroke of a pen,\u201d although she doesn\u2019t say why he hasn\u2019t done so.<\/p>\n

(It\u2019s perhaps noteworthy that before she became a senator, Warren was a purported expert on personal bankruptcy, which she almost never blamed on the people who borrowed the money).<\/p>\n

But it\u2019s probably only a matter of time before Biden does. The Wall Street Journal<\/a> reported last week that White House Press Secretary Jen Psaki teased that the moratorium on student loan repayments, only recently extended by Biden for the umpteenth time until August, will \u201cbe extended again or we\u2019re going to make a decision\u201d about \u201ccanceling student debt.\u201d October surprise anyone?<\/p>\n

So, as I\u2019ve written before<\/a> in this space, the Fed is not going to get any help from the fiscal authorities. Just as fast as the Fed removes dollars from the economy, the White House and Congress shovel even more in. This means even higher inflation and higher interest rates at a faster pace going forward.<\/p>\n

If you\u2019re a saver and looking to return to the halcyon days of 5% yields on bank certificates of deposit, this is good news for you. But if you buy groceries or gasoline or need a mortgage to buy a home, not so much. Just remember come November how it came to this pass.<\/p>\n

Visit back to read my next article! <\/p>\n

George Yacik<\/a>
\nINO.com Contributor - Fed & Interest Rates<\/p>\n

Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Federal Reserve Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting on May 3-4. It will likely get more aggressive in its fight against 8%-plus inflation. It\u2019s going to have to because just as fast as the Fed is trying to […]<\/p>\n","protected":false},"author":16,"featured_media":56844,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6920],"tags":[8524,6824,511,6938,1750,230],"class_list":["post-56843","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ino-com-contributors","tag-fed-monetary-policy","tag-federal-open-market-committee-fomc","tag-federal-reserve","tag-george-yacik","tag-inflation","tag-interest-rates"],"yoast_head":"\nLet's Get Serious - INO.com Trader's Blog<\/title>\n<meta name=\"description\" content=\"Fed Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Let's Get Serious - INO.com Trader's Blog\" \/>\n<meta property=\"og:description\" content=\"Fed Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/\" \/>\n<meta property=\"og:site_name\" content=\"INO.com Trader's Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/inocom\/\" \/>\n<meta property=\"article:published_time\" content=\"2022-04-28T12:00:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-04-26T19:48:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"628\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"George Yacik\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"George Yacik\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/\"},\"author\":{\"name\":\"George Yacik\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/338e515291677fcecc03e9138134bd40\"},\"headline\":\"Let's Get Serious\",\"datePublished\":\"2022-04-28T12:00:34+00:00\",\"dateModified\":\"2022-04-26T19:48:58+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/\"},\"wordCount\":874,\"commentCount\":1,\"publisher\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg\",\"keywords\":[\"Fed monetary policy\",\"Federal Open Market Committee (FOMC)\",\"Federal Reserve\",\"george yacik\",\"inflation\",\"interest rates\"],\"articleSection\":[\"INO.com Contributors\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/\",\"url\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/\",\"name\":\"Let's Get Serious - INO.com Trader's Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg\",\"datePublished\":\"2022-04-28T12:00:34+00:00\",\"dateModified\":\"2022-04-26T19:48:58+00:00\",\"description\":\"Fed Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting.\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage\",\"url\":\"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg\",\"contentUrl\":\"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg\",\"width\":1200,\"height\":628,\"caption\":\"Fed 50 Basis Points Rate Hike\"},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.ino.com\/blog\/#website\",\"url\":\"https:\/\/www.ino.com\/blog\/\",\"name\":\"INO.com Trader's Blog\",\"description\":\"Expert Charts, Trading Tips and Technical Analysis from INO.com\",\"publisher\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.ino.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\",\"name\":\"INO.com Trader's Blog\",\"url\":\"https:\/\/www.ino.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg\",\"contentUrl\":\"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg\",\"width\":400,\"height\":472,\"caption\":\"INO.com Trader's Blog\"},\"image\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/inocom\/\",\"https:\/\/www.linkedin.com\/company-beta\/1056449\/\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/338e515291677fcecc03e9138134bd40\",\"name\":\"George Yacik\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/637823661a7bc350a9185ff2bef387b1?s=96&d=identicon&r=pg\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/637823661a7bc350a9185ff2bef387b1?s=96&d=identicon&r=pg\",\"caption\":\"George Yacik\"},\"url\":\"https:\/\/wwwtest.ino.com\/blog\/author\/george-yacik\/\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Let's Get Serious - INO.com Trader's Blog","description":"Fed Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/","og_locale":"en_US","og_type":"article","og_title":"Let's Get Serious - INO.com Trader's Blog","og_description":"Fed Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting.","og_url":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/","og_site_name":"INO.com Trader's Blog","article_publisher":"https:\/\/www.facebook.com\/inocom\/","article_published_time":"2022-04-28T12:00:34+00:00","article_modified_time":"2022-04-26T19:48:58+00:00","og_image":[{"width":1200,"height":628,"url":"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg","type":"image\/jpeg"}],"author":"George Yacik","twitter_card":"summary_large_image","twitter_misc":{"Written by":"George Yacik","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#article","isPartOf":{"@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/"},"author":{"name":"George Yacik","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/person\/338e515291677fcecc03e9138134bd40"},"headline":"Let's Get Serious","datePublished":"2022-04-28T12:00:34+00:00","dateModified":"2022-04-26T19:48:58+00:00","mainEntityOfPage":{"@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/"},"wordCount":874,"commentCount":1,"publisher":{"@id":"https:\/\/www.ino.com\/blog\/#organization"},"image":{"@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage"},"thumbnailUrl":"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg","keywords":["Fed monetary policy","Federal Open Market Committee (FOMC)","Federal Reserve","george yacik","inflation","interest rates"],"articleSection":["INO.com Contributors"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/","url":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/","name":"Let's Get Serious - INO.com Trader's Blog","isPartOf":{"@id":"https:\/\/www.ino.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage"},"image":{"@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage"},"thumbnailUrl":"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg","datePublished":"2022-04-28T12:00:34+00:00","dateModified":"2022-04-26T19:48:58+00:00","description":"Fed Chair Jerome Powell indicated strongly last week that the Fed will likely raise interest rates by 50 basis points at its next meeting.","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.ino.com\/blog\/2022\/04\/lets-get-serious\/#primaryimage","url":"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg","contentUrl":"https:\/\/wwwtest.ino.com\/blog\/wp-content\/uploads\/2022\/04\/iSto_FEDReserve_Building2.jpg","width":1200,"height":628,"caption":"Fed 50 Basis Points Rate Hike"},{"@type":"WebSite","@id":"https:\/\/www.ino.com\/blog\/#website","url":"https:\/\/www.ino.com\/blog\/","name":"INO.com Trader's Blog","description":"Expert Charts, Trading Tips and Technical Analysis from INO.com","publisher":{"@id":"https:\/\/www.ino.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.ino.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.ino.com\/blog\/#organization","name":"INO.com Trader's Blog","url":"https:\/\/www.ino.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg","contentUrl":"https:\/\/www.ino.com\/blog\/wp-content\/uploads\/2018\/12\/inologo-400.jpg","width":400,"height":472,"caption":"INO.com Trader's Blog"},"image":{"@id":"https:\/\/www.ino.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/inocom\/","https:\/\/www.linkedin.com\/company-beta\/1056449\/"]},{"@type":"Person","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/person\/338e515291677fcecc03e9138134bd40","name":"George Yacik","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.ino.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/637823661a7bc350a9185ff2bef387b1?s=96&d=identicon&r=pg","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/637823661a7bc350a9185ff2bef387b1?s=96&d=identicon&r=pg","caption":"George Yacik"},"url":"https:\/\/wwwtest.ino.com\/blog\/author\/george-yacik\/"}]}},"_links":{"self":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/posts\/56843"}],"collection":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/comments?post=56843"}],"version-history":[{"count":0,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/posts\/56843\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/media\/56844"}],"wp:attachment":[{"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/media?parent=56843"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/categories?post=56843"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wwwtest.ino.com\/blog\/wp-json\/wp\/v2\/tags?post=56843"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}