4 ms·

Nobody has a crystal ball. The last time inflation was this big of a problem in the west (~1980) rates touched over 20% and stayed above 10% for multiple years.

by mjr00 4y ago

Nobody has a crystal ball. The last time inflation was this big of a problem in the west (~1980) rates touched over 20% and stayed above 10% for multiple years. What makes you so sure that 5% is the limit, or that there will be cuts after 6 months?

MuffinFlavored 4y ago
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html https://www.cmegroup.com/markets/interest-rates/cme-fedwatch... This stupid, basically gambling insights tool. > The CME FedWatch Tool is a tool used by traders and investors to track the probability of interest rate changes by the Federal Reserve (Fed). It uses Fed funds futures prices traded at the Chicago Mercantile Exchange (CME) to calculate the market's expectations for the future direction of interest rates. > The data represented by the CME FedWatch Tool represents the market's perception and expectation of future Fed decisions on interest rates. It is not a prediction made by the Fed, nor is it an official statement by the Fed on future interest rate plans. > It is difficult to assess the accuracy of the CME FedWatch Tool overall as it can be influenced by many factors including market speculation, economic data releases, and changes in global events. Some market participants may find it to be a useful tool to understand market sentiment, while others may consider it to be speculative at best. Ultimately, the accuracy of the tool can only be determined in hindsight, after the Fed has actually made its interest rate decisions. I believe the Fed also releases what they call a dotplot https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20221214.pdf https://www.federalreserve.gov/monetarypolicy/files/fomcproj... On page 4 you can see that they have rates forecasted as coming down 2024, 2025, etc.
- mjr00 4y ago
  Projections are just projections and subject to change. Check out the projections the Fed made in 2020: https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20201216.htm https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20... In 2020 they were projecting that 2022 inflation would be less than 2%, and rates continuing to be near-zero into 2023.
- disgruntledphd2 4y ago
  This is a big discussion in the financial news at present. Essentially the central banks keep saying that they will keep rates high for a while, and the market doesn't believe them. Personally, I never bet against people who run the money printers, but you do you.

by mjr00 4y ago

MuffinFlavored 4y ago

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html https://www.cmegroup.com/markets/interest-rates/cme-fedwatch... This stupid, basically gambling insights tool. > The CME FedWatch Tool is a tool used by traders and investors to track the probability of interest rate changes by the Federal Reserve (Fed). It uses Fed funds futures prices traded at the Chicago Mercantile Exchange (CME) to calculate the market's expectations for the future direction of interest rates. > The data represented by the CME FedWatch Tool represents the market's perception and expectation of future Fed decisions on interest rates. It is not a prediction made by the Fed, nor is it an official statement by the Fed on future interest rate plans. > It is difficult to assess the accuracy of the CME FedWatch Tool overall as it can be influenced by many factors including market speculation, economic data releases, and changes in global events. Some market participants may find it to be a useful tool to understand market sentiment, while others may consider it to be speculative at best. Ultimately, the accuracy of the tool can only be determined in hindsight, after the Fed has actually made its interest rate decisions. I believe the Fed also releases what they call a dotplot https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20221214.pdf https://www.federalreserve.gov/monetarypolicy/files/fomcproj... On page 4 you can see that they have rates forecasted as coming down 2024, 2025, etc.

mjr00 4y ago
Projections are just projections and subject to change. Check out the projections the Fed made in 2020: https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20201216.htm https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20... In 2020 they were projecting that 2022 inflation would be less than 2%, and rates continuing to be near-zero into 2023.
disgruntledphd2 4y ago
This is a big discussion in the financial news at present. Essentially the central banks keep saying that they will keep rates high for a while, and the market doesn't believe them. Personally, I never bet against people who run the money printers, but you do you.