Well covered in Part 1, here, the FOMC (Federal Open Market Committee) and Capital Markets also believe currently that interest rates will stay low for longer …. maybe we are hopeful they are both wrong (No maybe, we are!) but there is one word that we know the FOMC cannot allow to get out of control …
Inflation !
With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent.
During the 07-09 Great Financial Crisis, the FOMC then lead by Ben Bernanke, used the Feds balance sheet to purchase assets in order to lower rates, increase asset prices and calm markets….
This was unprecedented at the time….. Not today!
The current Bazooka is three times more ALREADY and will most certainly continue to grow in size and stimulus !
What if eventually the economy takes hold, and springs back to life –
Here is the traditional measure of inflation, Consumer Price Index from the BLS (Bureau of Labor Statistics) – again we like the afore mentioned Trimmed Mean and so does the FOMC!
Not to worry, we will be watching that 2ish % level closely…..
Inflation may occur, forcing the Feds hand at higher rates — time will tell!
Have a Great “FOMC and Interest Rates Part 2 Conclusion” Day!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments may be appropriate for you, please consult your financial advisor prior to investing!
Background
The is the vocal portion of J.K. Financial, Inc. a Dallas Texas Based Fee Only Total Wealth Financial Planning Firm. Founded by John Kvale, a Dallas Texas Fee only Financial Planner and Total Wealth Manager.
$treet-¢ents 
The Fed, Economics, Interest Rates and Interest Rates Review Part 2 What would force the FEDs hand?
Well covered in Part 1, here, the FOMC (Federal Open Market Committee) and Capital Markets also believe currently that interest rates will stay low for longer …. maybe we are hopeful they are both wrong (No maybe, we are!) but there is one word that we know the FOMC cannot allow to get out of control …
Inflation !
Here is a great post from earlier on Dallas Fed calculated Trimmed Mean Inflation Measure, the FOMC’s favorite!
Triple the Bazooka – Who Let the Money Out!
During the 07-09 Great Financial Crisis, the FOMC then lead by Ben Bernanke, used the Feds balance sheet to purchase assets in order to lower rates, increase asset prices and calm markets….
This was unprecedented at the time….. Not today!
The current Bazooka is three times more ALREADY and will most certainly continue to grow in size and stimulus !
What if eventually the economy takes hold, and springs back to life –
Here is the traditional measure of inflation, Consumer Price Index from the BLS (Bureau of Labor Statistics) – again we like the afore mentioned Trimmed Mean and so does the FOMC!
Not to worry, we will be watching that 2ish % level closely…..
Inflation may occur, forcing the Feds hand at higher rates — time will tell!
Have a Great “FOMC and Interest Rates Part 2 Conclusion” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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