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.
From FOMC statement September 16, 2020
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.
Heavy Week Concludes … Month End … Family Favorite Coming … Friday …
With two heavy posts this week, here and here and not only were they heavy, but they were about the FOMC (Federal Open Market Committee), Interest Rates, CPI (Consumer Price Index) and the Trimmed Mean Inflation measures…. Y.A.W.N for many!
Ya Ya we know you guys may not find this stuff as interesting as we do, but we like to at least let you know what we are watching and call attention to some of this so as to know what may or may not change or cause issues… thanks for the reading this week….
Month End Coming
With the afore mentioned heavy posts and month end coming along with two Video reviews shortly (Newsletter and September) we thought we could slide into the weekend as it is a Friday….
Speaking of Month End…. this brings a family favorite into view OCTOBER which means HALLOWEEEN … (over week ago of rats, pumpkins and a Crow that keeps falling of the front rail of the entry at the house already set up for the occasion) – not kidding – ok so yours truly has become fond of the warmer months along with the long days…. but occasionally the guard is let down….. the Mrs. and Myself from a few years ago ….
Hope at least got a chuckle …. Green Make Up stuck around for weeks
Next week, back to heavy … and lot’s to talk about …
Today is a Friday … Enjoy your weekend and see you next week!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
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Posted in Economy, FOMC, John Kvale, Market Comments, Personal
Tagged CPI, FOMC, Halloween, Trimmed Mean