Over the weekend (no jog as an early Saturday walk with dog through the local college campus garnered a huge stubbed toe from a protruding curb….cannot make this up … digressing) a long ago post about the FOMC and their main enemy entered the frontal lobe…
Our September 23, 2020 Post – Federal Reserve Enemy – Inflation
“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 …
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″
The original post goes on the talk about the expansion of the balance sheet and the lack of inflation at the current time.
Fast forwarding to today, the balance sheet is unwinding and there certainly are higher inflation numbers…
If the Fed sticks to it’s word, their fears may justify continued pressure to slow an already slowing economy!
Hang tight, we have your back, but bumps may be on the horizon!
Have a Great “Federal Reserve Replay” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth