The Federal Reserve raised rates by 25 basis points as expected. No Surprise.
For all the folks who hate pulling out a calculator that is 0.25%.
We need to drive deeper in what the Federal Reserve Chair Jerome Powell
said. Here is what I heard
1) He says that disinflationary process had started. This means that they feel
confident that they now have a grip on inflation. They are not ready to declare
victory.
2) He did not say there will not be more hikes. “If we do see inflation
coming down much more quickly, that will play into our policy setting, of
course,” Powell said. I expect them to do another 25 basis point increase next
month. Mark my words.
3) Powel says there will not be rate cuts in 2023. This means that we are
going to live in a high interest environment for a long time. Any readers or my
followers who are thinking of blowing their cash or doing investments, I would
think twice. Cash will be hard to borrow for another year and your bill at the
grocery will continue to be high.