Fed Dismisses Weak Data to Posture for Another Rate Hike

Fed Dismisses Weak Data to Posture for Another Rate Hike

SchiffReport recorded Saturday, May 6

* On Wednesday of this week, the Federal Reserve against a rate hike in May
* But based on their official statement, the market assigned a much higher probability
* To a rate hike coming in June
* In fact, following Friday's slightly better-than-expected Non-Farm Payroll report, the probability of a June rate hike is not near 100%
* In other words, the markets are certain that a quart-point hike is coming next month
* If the Federal Reserve does raise its rates by a quarter point, that will bring the floor of the official rate finally up to 1%
* The ceiling being 1.25%, so presumably the Fed will target a Fed funds rate somewhere between 1 - 1.25%
* This is still an exceptionally low interest rate indicating extreme monetary accommodation
* Remember, 1% is the absolute low that Alan Greenspan lowered interest rates to in the aftermath of the 2001 recession and the 9/11 terrorist attack
* That artificially low interest rate really provided the air for the housing bubble that resulted in the 2008 Financial Crisis
* So despite these rate hikes, the Fed monetary policy remains extremely accommodative,
* Just not as accommodative as they were before
* If you recall, the main reason I was certain that the Fed was not like to deliver these rate hikes
* Is because I took the Fed at its word that it was data dependent
* And I believed that the Fed would use weak data as an opportunity or an excuse to not raise interest rates
* I was wrong about that, because the Federal Reserve has ignored all of the weakening economic data and has raised rates anyway
* It has raised them very slowly, but nonetheless, it has raised interest rates despite the fact that all the data they claim to depend on would not support that decision
* I thought for 2 reasons the Fed would not want to hike rates
* The first be to delay the onset of the next recession
* After all, raising rates into a weakening economy it would accelerate the onset of that recession
* I thought the Fed would always err on a delay
* But apparently, that is not a concern for the Fed
* One of the reasons this might be the case is because the Fed is concerned about having some ammunition to fight the next recession, rather than to postpone the onset
* Meaning that they want to get interest rates further above zero before the recession officially begins so that once it is here, they have more room to cut rates
* Another reason that the Fed has been more willing to raise rates has to do with the action in the U.S. stock market
* I thought the Fed would be reluctant to raise rates for fear of how higher rates might impact the stock market
* But it seems the stock market has found another prop
* It is no longer relying on cheap money; it now also relying on hope and optimism surrounding the election of Donald Trump
* And the idea that he is somehow going to "Make America Great Again"
* With deregulation, tax cuts and all sorts of economic stimulus
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Avsnitt(1081)

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Get an additional 15% off an annual membership at https://masterclass.com/goldCut your wireless bill to $15/month at https://mintmobile.com/gold. $45 upfront payment required. For new customers on the first 3 month plan only.Join my Locals community to get The Pete Schiff Show ad-free! Plus get access to special live reports and Q&As. Visit https://schiffradio.com/premium to become a member.Invest like me: https://schiffradio.com/investSIGN UP FOR MY FREE NEWSLETTER: https://www.europac.comSchiff Gold News: http://www.schiffgold.com/newsBook Store: https://schiffradio.com/booksFollow Peter Schiff on Twitter: http://www.twitter.com/peterschiffFollow Peter Schiff on Instagram: https://instagram.com/peterschiffFollow Peter Schiff on TikTok: https://www.tiktok.com/@peterschiffofficialFollow Peter Schiff on Facebook: http://www.facebook.com/peterschiff Our Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

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NetSuite is offering a one-of-a-kind flexible financing program. https://netsuite.com/goldCheck out the exclusive discounts for my audience https://neolightbed.comJoin Peter on the Annual Investor Summit at Sea! Get the details and reserve your spot at https://InvestorSummitAtSea.comJoin my Locals community to get The Pete Schiff Show ad-free! Plus get access to special live reports and Q&As. Visit https://schiffradio.com/premium to become a member.Invest like me: https://schiffradio.com/investSIGN UP FOR MY FREE NEWSLETTER: https://www.europac.comSchiff Gold News: http://www.schiffgold.com/newsBook Store: https://schiffradio.com/booksFollow Peter Schiff on Twitter: http://www.twitter.com/peterschiffFollow Peter Schiff on Instagram: https://instagram.com/peterschiffFollow Peter Schiff on TikTok: https://www.tiktok.com/@peterschiffofficialFollow Peter Schiff on Facebook: http://www.facebook.com/peterschiff Our Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

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Visit https://indeed.com/peter to start hiring now.Register for The 2024 MoneyShow in Miami, FL (April 10-12): https://www.miamisymposium.com/speakers/4532d84bf93311d3a5dd00104b96e7b5/peter-schiff/?scode=062042Join Peter on the Annual Investor Summit at Sea! Get the details and reserve your spot at https://InvestorSummitAtSea.comJoin my Locals community to get The Pete Schiff Show ad-free! Plus get access to special live reports and Q&As. Visit https://schiffradio.com/premium to become a member.Invest like me: https://schiffradio.com/investSIGN UP FOR MY FREE NEWSLETTER: https://www.europac.comSchiff Gold News: http://www.schiffgold.com/newsBook Store: https://schiffradio.com/booksFollow Peter Schiff on Twitter: http://www.twitter.com/peterschiffFollow Peter Schiff on Instagram: https://instagram.com/peterschiffFollow Peter Schiff on TikTok: https://www.tiktok.com/@peterschiffofficialFollow Peter Schiff on Facebook: http://www.facebook.com/peterschiff Our Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

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Cut your wireless bill to $15/month at https://mintmobile.com/gold. $45 upfront payment required. For new customers on the first 3 month plan only.Register for The 2024 MoneyShow in Miami, FL (April 10-12): https://www.miamisymposium.com/speakers/4532d84bf93311d3a5dd00104b96e7b5/peter-schiff/?scode=062042Join Peter on the Annual Investor Summit at Sea! Get the details and reserve your spot at https://InvestorSummitAtSea.comJoin my Locals community to get The Pete Schiff Show ad-free! Plus get access to special live reports and Q&As. Visit https://schiffradio.com/premium to become a member.Invest like me: https://schiffradio.com/investSIGN UP FOR MY FREE NEWSLETTER: https://www.europac.comSchiff Gold News: http://www.schiffgold.com/newsBook Store: https://schiffradio.com/booksFollow Peter Schiff on Twitter: http://www.twitter.com/peterschiffFollow Peter Schiff on Instagram: https://instagram.com/peterschiffFollow Peter Schiff on TikTok: https://www.tiktok.com/@peterschiffofficialFollow Peter Schiff on Facebook: http://www.facebook.com/peterschiffOur Sponsors:* Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD* Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.comPrivacy & Opt-Out: https://redcircle.com/privacy

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